How three of Britain’s best-known fund bosses pocketed £105m between them, sparking concerns the industry is out of control
- Terry Smith and Nick Train together pocketed up to £81.2m
- Neil Woodford, who was also adored before a meltdown, is entitled to £23.7m
- Critics say the pay-outs signal managers’ payments are divorced from reality
Britain’s three best-known fund managers raked in as much as £105 million between them last year, sparking concerns the industry is out of control.
Terry Smith and Nick Train – who are seen as stars able to produce huge returns for investors – together pocketed up to £81.2 million.
And Neil Woodford, who was similarly adored before a meltdown which saw his flagship fund shut to withdrawals earlier this month, is entitled to a £23.7 million dividend.
Nick Train (left) and Terry Smith (right) – who are seen as stars able to produce huge returns for investors – together pocketed up to £81.2m
Critics said the huge pay-outs are a sign that managers’ payments are divorced from reality – meaning it no longer matters if they make money for their customers or not.
Luke Hildyard, of the High Pay Centre campaign group, said: ‘This is totally unseemly, regardless of whether these investment managers are making money.
‘These people are charged with looking after our retirement savings on behalf of pension funds. You would expect regulators to be taking a much closer look at this.’
Woodford Investment Management paid a bumper dividend of £36.5 million for the year to March 2018 to Woodford and his chief executive Craig Newman.
This suggests Woodford, 59, was in line for £23.7 million from his 65 per cent stake in the business. It is understood he used some of this cash for a wage, reinvested some and donated the rest to charity.
His flagship Equity Income fund has lagged behind rivals as a series of bets on small and risky firms come up short.
Savers fled for the exits this year, forcing Woodford to freeze the funds so he can sell enough stock to give them their money back.
Woodford’s rivals Smith and Train have delivered far higher returns for their investors – but pocketed eye-watering sums of cash.
Smith’s popular firm Fundsmith earned him up to £62.4 million, making him one of the top earners in global finance.
Woodford Investment Management paid a bumper dividend of £36.5m for the year to March 2018 to Woodford and his chief executive Craig Newman
The manager’s equity fund would have turned £1,000 invested at its launch in 2010 into £4,520 today.
Meanwhile, the best-paid director at Lindsell Train Ltd – thought to be Train, 60, or his 59-year-old co-founder Michael Lindsell – was handed £8.2 million in wages and a bumper dividend of £10.6 million.
Train’s flagship Lindsell Train Investment Trust would have turned £1,000 invested when it launched in 2001 into £20,500 now. But campaigners said the amount they earn is still unjustified.
James Daley, of Fairer Finance, said: ‘Just because you’re trading in billions of pounds doesn’t mean you need a percentage of that as a cut.’