Woodford Says He’s Shutting Down Firm After Ouster From Fund
Woodford Says He’s Shutting Down Firm After Ouster From Fund
(Bloomberg) -- Woodford Investment Management is shutting down after its founder was dramatically ousted from managing a fund bearing his name.
Neil Woodford said in a statement Tuesday that he has “taken the highly painful decision to close Woodford Investment Management.” The firm terminated its agreement to serve as portfolio manager to the publicly listed Woodford Patient Capital Trust Plc, according to a regulatory filing.
“I personally deeply regret the impact events have had on individuals who placed their faith in Woodford Investment Management and invested in our funds,” Woodford said in the statement. The firm will close “in an orderly fashion” after fulfilling its remaining management responsibilities, he said.
Earlier Tuesday, the administrator of his main investment vehicle fired Woodford as the fund’s manager and said the LF Woodford Equity Income Fund will be liquidated. Woodford initially objected, saying the decision wasn’t in the interests of long-term investors.
Woodford’s ouster caps the most difficult chapter in a career spanning more than a quarter of a century. A fund manager at Invesco Ltd. 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% return in 2015, the fund’s performance dropped below peers, leading many investors to pull money. As they cashed out, 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 roughly 260 million-pound investment back, Woodford had little choice but to halt redemptions to prevent a firesale.
To contact the reporter on this story: Lucca de Paoli in London at gdepaoli1@bloomberg.net
To contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, ;Alan Goldstein at agoldstein5@bloomberg.net, Josh Friedman
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