Woodford Issues Another Apology, Remains Bullish on ‘Cheap’ U.K.
Woodford Issues Another Apology, Remains Bullish on ‘Cheap’ U.K.
(Bloomberg) -- Neil Woodford issued a new apology to investors in his frozen fund, blaming “a momentum-driven market” for a debacle that’s crippled an investment empire that once approached $20 billion.
In a letter to independent financial advisers and other intermediaries, the embattled British money manager also said he’s continuing to work on shifting positions out of illiquid investments. He cited “some company-specific issues” in his portfolio for the poor performance, as well as a “valuation-insensitive,” longer-than-expected bull market for the stocks he avoided.
The fund manager gated the LF Woodford Equity Income Fund earlier this month following an outpouring of cash and poor performance. The fund’s assets are valued at about 3.6 billion pounds ($4.6 billion) by Morningstar, down from 4.3 billion pounds at the start of May. The travails have spilled over to his other investment vehicles, with the Financial Times reporting that Woodford is at risk of being dropped by the listed investment trust that bears his name.
“Further carefully-managed activity is anticipated in the weeks and months ahead to execute the rest of this shift” away from illiquid assets, Woodford said in the letter, which was sent Tuesday. Regarding the blocked redemptions, “I realize this will be concerning and frustrating to you and I am deeply sorry for putting you in this situation and for the impact on your workload,” he said.
Woodford defended his bullish stance on Britain, as well as his conviction in the fund’s more liquid but still undervalued portfolio when the freeze is called off. He didn’t give a time frame for when the gate may be lifted.
While he predicted the slowing global economy will hit equity markets in the near term, “the U.K. is one of the few regional economies that has enough internal momentum to withstand growing global headwinds.” Many companies that generate most of their cash from the U.K. are “as cheap as I can ever remember,” said Woodford, who vowed to continue seeking out undervalued companies.
Woodford struck out on his own about five years ago, attracting billions in funds after two decades of successful stock picking at Invesco Perpetual made him a brand name among retail investors.
To contact the reporter on this story: Suzy Waite in London at swaite8@bloomberg.net
To contact the editors responsible for this story: Shelley Robinson at ssmith118@bloomberg.net, Keith Campbell, Ross Larsen
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