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Barnett banks big profit as Invesco sells £144 million AJ Bell stake

7 June 2019

AJ Bell's largest shareholder sells more than a third of its stake, as Invesco's Mark Barnett banks big profit on investment he inherited from Neil Woodford.

Mark Barnett has banked a big profit on his stake in AJ Bell (AJBA) as Invesco sold more than a third of its stake in the online stockbroker.

Invesco has cut its stake in the business from 25.4% to 16.1% of the shares, banking £144 million as it sold 9.3% of the company's shares at a price of 380p. The stock fell 2% to 392p on the news.

'Invesco has been a long-standing investor in AJ Bell and has indicated that, following completion of the placing, it intends to remain a significant, long-term shareholder of the company,' bookrunner Numis said in a stock market announcement. 

The bulk of the stake is held by Barnett's £7.5 billion Invesco High Income and £3.2 billion Income funds. 

The position is legacy of Barnett's predecessor, Neil Woodford, who first invested in the business in 2007 when he bought 15% of AJ Bell when it was unquoted and valued at just £78 million. 

It has been a hugely profitable investment for Invesco since and has recently helped Barnett's Perpetual Income & Growth (PLI) investment trust through a difficult time. It has also featured in the group's Invesco Perpetual UK Smaller Companies (IPU) and Keystone (KIT) investment trusts.

Shares in AJ Bell have surged following its float in December 2018 at a price of 160p, peaking at 482p last month.  The company is currently valued at £1.7 billion and has risen to become the second largest holding in Barnett's Income fund, at 5.2% of the portfolio. AJ Bell is the ninth biggest holding in High Income, at 2.3% of the fund.

The massive windfall will be a bitter pill for Woodford to swallow after he was forced to suspend dealing in his Woodford Equity Income fund earlier this week as redemptions surged on the back of a torrid run. 

Woodford bought into the company again after leaving Invesco to set up his own fund group but in February 2018, 10 months before AJ Bell's float, Woodford sold his £40 million stake to his old employer.

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