Former star fund manager Neil Woodford set to open new firm

imageStock Markets15 hours ago (Feb 15, 2021 09:50)

© Reuters.

By Samuel Indyk

Investing.com – Neil Woodford, the former head of collapsed investment company Woodford Investment Management, is preparing to open a new fund. The new firm, first reported by The Sunday Telegraph, is to be based in Jersey and to be called Woodford Capital Management Partners.

Background

Neil Woodford was a former darling of the UK fund management industry. First gaining his reputation at Invesco Perpetual, Woodford went on to set up his own fund in 2014. In early years his fund had some success but mismanaged money and high redemptions caused shockwaves through the UK fund management industry in 2019.

What happened?

An investigation by the Sunday Times discovered that Woodford had invested funds in small UK AIM stocks and unlisted companies. As assets began to dwindle and his reputation in shatters, clients began requesting redemptions which given the investment strategy made the requests extremely difficult to fulfil.

Woodford, who was often referred to as the UK’s Warren Buffett, was forced to limit redemptions, meaning clients were forced to go month’s without access to their cash. In the end, the fund was formally shut down in October 2019 and the investment company was closed down. Some investors are still waiting to get their money back with approximately £200mln of money is still stuck in the closed fund.

With his reputation in tatters and recent track record managing money, it may be difficult for investors to trust him to manage their money. “The news that Neil Woodford is looking to make a comeback will come as a surprise to many, especially those thousands of embattled investors who are still waiting to get the last of their money back,” said stockbroking firm AJ Bell.  

The new firm will focus on advising professional investors rather than retail customers. Woodford said if he were to return to managing retail money, he would not stray far from large listed companies. Nevertheless, in his own words, there will still be a lot of people who wouldn’t touch him with a 10-foot bargepole.

Former star fund manager Neil Woodford set to open new firm

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