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Neil Woodford, ousted from Equity Income fund, will close all remaining funds

Lucca de Paoli
PA

Neil Woodford, one of Britain’s best-known investment managers, is shutting down his remaining funds after he was sacked from managing his troubled flagship fund.

In a statement late on Tuesday, Mr Woodford said he has “taken the highly painful decision” to close Woodford Investment Management, the umbrella firm for several funds, including LF Woodford Equity Income Fund.

“I personally deeply regret the impact events have had on individuals who placed their faith in Woodford Investment Management and invested in our funds,” he said.

The company will close “in an orderly fashion” after fulfilling its remaining management responsibilities, he added.

Earlier on Tuesday, the director of Woodford Equity Income fired Mr Woodford as the fund’s manager and said the fund will be wound up. Mr Woodford initially objected, saying the decision wasn’t in the interests of long-term investors.

His ouster capped the most difficult chapter in a career spanning more than a quarter of a century. A fund manager at Invesco for a quarter-century, he made his reputation by sitting out the dot-com bubble at the turn of the millennium and selling down bank shares in the run-up to the financial crisis, before setting out on his own in 2014. But bets on smaller and even unlisted companies at his new firm eventually were his undoing, leaving him unable to pay back investors who wanted out.

After an impressive 16 per cent return in 2015, the fund’s performance dropped below peers, leading many savers to pull out their money. As they cashed out, Mr Woodford was forced to sell more liquid holdings, leaving remaining clients with harder-to-sell assets. When a pension fund for the council workers of an English county asked for its £260m investment back, Mr Woodford had little choice but to halt redemptions to prevent a fire sale.

Many of the hundreds of thousands of savers who still have money locked in the fund are likely to get back less than what they originally invested, once its liquidation begins.

Since Mr Woodford is no longer the manager of the fund, it will be renamed as LF Equity Income Fund.

Bloomberg