(Bloomberg) -- Peter Hargreaves, co-founder of online investment platform Hargreaves Lansdown Plc, accused disgraced stock-picker Neil Woodford of taking cash from investors when he knew his business was collapsing, in an interview with the Daily Mail.
The U.K. investment services firm said Woodford refused to bow to pressure to shelve fees on his flagship LF Woodford Equity Income Fund after it was suspended in June because he “knew he was toast and took as much money as he could, anticipating the demise of his business.”
Hargreaves has come under intense scrutiny for continuing to promote the man once celebrated as one of the U.K.’s top fund managers despite growing reservations about the portfolio. The firm said in June that a quarter of investors using its platform were exposed directly or indirectly to the now frozen fund.
Woodford stunned the financial world that month when he suspended withdrawals from the fund, citing an inability to sell holdings quickly enough to meet redemption requests. He told the newspaper that he appreciated that many people in the financial world wished to express their views.
“Was he a great stock picker? With the benefit of hindsight, I am not sure,” Hargreaves said. “It appears he didn’t have the knowledge in unquoted companies and rarely a week went by without him being steeped in various problems. The crux of the matter was his organization was probably inadequate for purpose -- couldn’t cope with the billions that poured in from investors.”
The firm rejected any notion that the business was “toast.”
The administrator of the LF Woodford Equity Income Fund hired BlackRock Inc. to prepare the portfolio for winding down, according to a statement from Link Fund Solutions on Tuesday.
“We did not agree with Link’s decision and fully expected the fund to reopen at the end of the year as investors had previously been advised,” a Woodford spokesman said.
(Updates with comment from Woodford in sixth, eighth paragraphs)
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