Godfrey is aiming to raise the money to fund the development of The People’s Trust. He is looking for about 5,000 small investors to pay as little as £20 to become a “founder”, which will give them the opportunity to invest in the trust’s 2017 listing at a small discount, according to a launch statement for the trust on October 23.
Godfrey told Financial News: “We want our founders to be committed to the concept, and it seemed like the best way to do that was to structure it so that without their £20s, the trust would not exist. There will be no other owners to benefit from it except the customers.”
The fund managers that have lent their names to the initiative – First State Investments, Orbis Investments and Big Issue Invest, the fund management arm of the Big Issue homelessness charity with which Godfrey had prior involvement – may be among its fund managers in the future, the trust said.
Willis Towers Watson, meanwhile, has agreed to advise the trust on the selection of fund managers, of which there will ultimately be between five and 10, while law firm Freshfields Bruckhaus Deringer has been providing legal input.
The trust, which says it will be wholly owned by its customers, will aim for a long-term return of approximately 7% a year over a seven-year period. It says it will be looking for fund managers with a “high-conviction, low-turnover” style and will have a heavy focus on corporate governance.
It will look for “long-term strategies and responsible behaviour at investee companies” and promises to “actively engage” where improvements can be made. In a nod to the involvement of Big Issue, it will also invest 1% of its money in “improving lives directly via social impact investment”.
Godfrey said the trust’s investors would be charged an all-in cost of between 1% and 1.5% of assets.
He said: “We’ll be doing all we can to make that closer to 1% than 1.5%.” He pointed out this would include the costs of setting up an in-house ISA structure for small investors, as well as fund manager fees. The trust, being owned by its customers, will take no management fee of its own.
As previously indicated, the trust’s staff will not be paid any bonuses. Instead, they will be paid partly in shares in the trust that must be held for seven years.
In the launch statement, Godfrey said: “The People’s Trust has a clear purpose: better investment returns for you, and a better impact on society.”