InvestmentsMar 12 2018

Woodford flees AJ Bell ahead of IPO and shuns Atom bank

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Woodford flees AJ Bell ahead of IPO and shuns Atom bank

Neil Woodford is selling his shares in platform company AJ Bell ahead of its float, and has declined to put more money into Atom Bank.

As FTAdviser has reported this morning, AJ Bell, a platform and self-invested personal pension provider, is to float on the stock market in the coming year.

Woodford Investment Management sold a £40m shareholding in the company to Invesco Perpetual, an investment house which is one of the top two shareholders in AJ Bell, and also happens to be Mr Woodford’s former employer.

In addition to selling those shares, Mr Woodford informed the board of Atom Bank, a challenger bank that is not listed on any stock exchange, that he will not be putting more cash into the company when it next seeks money from investors.

A Woodford Investment Management spokesman denied this decision was forced on the veteran investor by the huge redemptions from his flagship Woodford Equity Income fund.

The fund has fallen in size from £10.1bn to £6.8bn over the past year, with significant investors such as Jupiter, Aviva and Architas fleeing the fund as performance has deteriorated.

The Woodford Equity Income fund has lost 10 per cent over the past year to 9 March, and is the absolute worst performer in the IA UK Equity Income sector in the past year.

The Woodford IM spokesman said: “Neil has to make decisions about the allocation of capital all the time. It has always been our clearly defined strategy to nurture young technology-intensive businesses through the early stages of their development. In some cases, such as Atom Bank, once those early hurdles have been overcome it is entirely appropriate these businesses raise capital from other investors rather than Woodford."

“When we sell, or don’t participate in a funding around, it is not a function of an inability to follow on, but typically a function of our preference to focus our capital on businesses earlier in their lifecycle or which have the potential for more attractive returns.

"Despite outflows, we have supported follow-on and new funding rounds in more than 20 companies in the past six months, in addition to the recently announced rights issue for Provident Financial.”

David.Thorpe@ft.com