‘Sorry’ Woodford to make comeback with new fund firm
Neil Woodford has announced his return to fund management.
15th February 2021 08:59
by Hannah Smith from interactive investor
Neil Woodford has announced his return to fund management and apologised for his mistakes on the Woodford Equity Income fund.
Neil Woodford has announced his return to fund management following the 2019 collapse of his former fund which left investors nursing heavy losses.
In an exclusive interview with The Sunday Telegraph, Woodford said he was “sorry” for his mistakes on the Woodford Equity Income fund, but criticised administrators Link Fund Solutions for shutting the fund down.
In whatthe Telegraph described as a “tearful” interview, Woodford said he could have rescued the fund had it remained open.
“I'm very sorry for what I did wrong. What I was responsible for was two years of underperformance - I was the fund manager, the investment strategy was mine, I owned it and it delivered a period of underperformance,” Woodford said.
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‘Damaging decisions’
“I didn't make the decision to suspend the fund, I didn't make the decision to liquidate the fund. As history will now show, those decisions were incredibly damaging to investors, and they were not mine.”
He also refuted as “lies” the suggestion that a macho culture at Woodford Investment Management contributed to the failure, which caused shockwaves across the investment world.
Woodford now plans to launch a new Jersey-based investment firm called Woodford Capital Management Partners, which will only seek to raise money from professional investors.
How the saga unfolded
The Woodford Equity Income fund grew to around £10 billion at its peak in 2017. After a series of stock selection mistakes led to underperformance, many investors tried to withdraw their money at once and the fund shrank to around £3 billion in size. But because the unlisted companies it owned proved difficult to liquidate quickly, Woodford was finally unable to meet redemption requests and the fund was suspended. He was later criticised for continuing to charge management fees while the fund was shuttered.
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Link Fund Solutions came in as administrator and wound down the fund, gradually returning money to investors at a loss after a firesale of the fund’s holdings in a process which is still ongoing.
The Financial Conduct Authority is still investigating the suspension and collapse of the Woodford Equity Income fund.
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