Woodford’s Smaller Fund Locks Out Investors as Firm Shutters

(Bloomberg) -- More investors are now locked out of their funds as one of the last remnants of Neil Woodford’s empire suspended dealing.

The administrator of the LF Woodford Income Focus Fund has stopped redemptions in the fund, according to an emailed statement on Wednesday. The suspension will be formally reviewed at least every 28 days and investors should expect an update within the next 14 days, according to the statement.

“The redemptions in the fund will reach a level whereby it may no longer be able to continue to meet redemption requests,” Link Fund Solutions said in the statement. The administrator will look at all options, including the appointment of an alternate investment manager or the liquidation of the fund.

The move is one of the final nails in the coffin for the former star fund manager whose stunning fall from grace counts as one of the most dramatic in London’s financial history.

Late on Tuesday, Woodford said he was closing his investment firm after he was fired by Link as the manager of his flagship fund, which the administrator said it will liquidate. The smaller Focus fund manages just over 250 million pounds ($318 million) in assets, according to Morningstar Inc.

He built his reputation by calling major swings in technology, tobacco and other stocks over two decades while at Invesco Perpetual. He helped amass 33 billion pounds in assets during his time at Invesco and large chunks of it followed him out the door.

But style drift would be his undoing. In his flagship LF Woodford Equity Income fund, what started as a gradual shift out of large-cap companies into smaller and smaller stocks coupled with poor performance left him unable to pay back investors who wanted their money. In June, he suspended redemptions on that fund, shocking the U.K.’s financial market.

Woodford’s Smaller Fund Locks Out Investors as Firm Shutters

Woodford’s Income Focus fund’s assets under management have dropped from as much as 747 million pounds in October 2017, according to data compiled by Morningstar.

©2019 Bloomberg L.P.

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