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Disgraced Fund Manager Woodford Plans New Investment Firm

Lucca de Paoli
·2 min read

(Bloomberg) -- Fund manager Neil Woodford plans to start a new firm, as the once-feted investor looks to bounce back from a dramatic fall from grace.

Woodford will be the chief investment officer of Woodford Capital Management, according to an emailed statement from a spokesperson. The firm will not serve mom-and-pop investors and will focus on the biotech sector, including investments that were once held in his now shuttered flagship fund.

“The assets will form the cornerstone of a new strategy to rebuild the Woodford investment operation under the WCM brand, serving institutional and high net worth investors,” the spokesperson said. The firm will be based in the U.K. island territory of Jersey and in London.

Once celebrated as the Oracle of Oxford for his investing skills, Woodford’s reputation was tarnished in 2019 after he was forced to close his flagship fund to redemptions. Rather than investing in blue-chip firms, where he made his name while picking stocks at Invesco Ltd., Woodford made bets on small and even unlisted companies, leaving him unable to pay back investors who wanted out. The affair shook retail investors’ confidence in stock pickers, prompted questions in parliament and is the subject of two books.

Any comeback is subject to an ongoing investigation by the Financial Conduct Authority, which could forbid him from managing money for certain investors.

The plans were first reported on Sunday by the Telegraph. Woodford said in an interview with the U.K. newspaper that administrator Link Fund Solutions took the decision to suspend the stockpicker’s fund, which was “incredibly damaging” to investors.

Link, which handled the back office management of Woodford’s now-liquidated Equity Income Fund, said on Monday that redemptions were halted as part of a decision taken with the interest of investors in mind.

“Any suggestion that Woodford Investment Management was not aware of the possibility of suspension, or did not engage in discussions concerning the decision to suspend, is incorrect,” a spokeswoman for Link said in a statement. “The decision to suspend the fund, which WIM did not object to, was taken to protect all investors in the fund following a sustained period of underperformance and an increased level of redemptions.”

Woodford’s new fund will raise money from professional investors and will look at companies that will develop into “the likes of Immunocore, Kymab, Synairgen, Nanopore,” the Telegraph said.

(Updates with Woodford comment on administrator and Link reply from 6th paragraph)

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