By Maiya Keidan and Simon Jessop

Invesco Ltd said money manager Mark Barnett would leave the company after 24 years, ending a tough couple of years in which clients pulled billions from his funds.

Barnett was impacted by the high-profile collapse of former Invesco colleague Neil Woodford's firm, after it turned the spotlight on their shared and long-standing p, actice of holding relatively large positions in illiquid assets, which may be hard to sell quickly.

Woodford ultimately chose to close his firm after his flagship fund was forced to suspend dealing having struggled to free up cash to pay back clients seeking to leave. It also prompted the regulator to take a closer look at the practice.

Fund rating agency Morningstar cited the issue of illiquid holdings when downgrading Barnett's Invesco High Income UK and Income UK funds in November, a move he rejected at the time, saying they were "appropriately positioned".

With many of Barnett's listed holdings also performing poorly, hit in part by a period of underperformance for UK-focused companies, investors continued to pull their money.

Invesco's UK Strategic Income, High Income and Income funds had seen collective outflows of just over 2 billion pounds ($2.44 billion) in the year to September 2019.

While Invesco appointed Martin Walker as co-head of UK equities alongside Barnett in November, it was not enough to stop him being dropped as manager by the Edinburgh Investment Trust in December, and last month by Perpetual Income and Growth Trust.

After appointing Stephanie Butcher to the role of chief investment officer at the start of the year, Invesco announced in March plans to sell all of its unlisted equity holdings and reinvest the money in listed stocks.

Invesco, which also announced a reorganisation of its UK Equity product portfolio, said on Friday that James Gladstone and Ciaran Mallon will be taking over as co-managers of the open-ended funds that Barnett was responsible for.

"As we reorganise the UK Equities portfolio and after discussion with Mark Barnett, we have mutually concluded that this is the right time for him to hand over the leadership of these funds and leave Invesco," Butcher said in a statement.

"When I became CIO in January, I made it clear I would not shy from introducing change where I saw it necessary."

The Invesco UK Strategic Income Fund will also be merged with the Invesco Income Fund, according to the release.

"Invesco clearly want to try and get their UK franchise back on the front foot, however it will take a long time for the new managers to turn around performance," said Ryan Hughes, head of active portfolios at AJ Bell.

($1 = 0.8201 pounds)

(Reporting by Maiya Keidan and Carolyn Cohn in London and Samantha Machado in Bengaluru; Editing by Emelia Sithole-Matarise and Louise Heavens)