Neil Woodford has said he is "extremely sorry" for the suspension of his fund, and blamed the stock market for "anticipating" that it would happen and forcing him to take action.
It was announced on Monday that dealing in the £3.7bn Woodford Equity Income fund is suspended, this means investors cannot sell the fund and take their cash out. They can not invest in the fund either.
The suspension came following a sustained period of under performance and investors pulling £9m a month from the fund every working day in May.
In a video published on his company’s website yesterday (June 4) Mr Woodford said: "This is difficult and frustrating for investors.
"It has happened because of an increased level of redemptions, and then the stock market anticipating that this would lead to us having to sell stocks, we felt the prices we would be able to achieve for those sales would be disadvantageous to investors, so we felt that suspending the fund gives us the time and space to execute the strategy, which is to have no unquoted stocks by the end of the year.
"The capital will be reinvested in FTSE 350 and FTSE 100 stocks that fit in with our strategy but are also very liquid.
"The strategy remains the same, I am extremely sorry this has happened, this decision was motivated by the interests of investors."
Mr Woodford said he will continue to price the fund on a daily basis, to enable investors to see the value of their investment, even if they cannot exit the investment at this time.
James Klempster, head of investment management at MGIM, a fund of funds business, said he sold out of Woodford’s funds in 2016 due to concerns about the level of illiquid investments.
He said: "MGIM sold Woodford in August 2016 as there were too many illiquid holdings and too many large ownership interests in small companies, which were deemed imprudent from a risk management perspective."
But Dzmitry Lipski, investment analyst at Interactive Investor, a platform, said: "Investors shouldn’t panic - the best thing to do is to sit it out and wait for Woodford to provide further clarity as to how the fund will be managed going forward and how he is planning to resolve the issues.
"The fund today is very different to where it was three years ago, with much of the unquoted holdings transferred to Patient Capital. But clearly when there is a run for the door, any unquoted holdings are going to be problematic."
Yesterday platforms holding the find assured advisers and discretionary fund managers (DFMs) they are still able to get a valuation for the suspended Woodford Equity Income fund.
Discretionary fund managers will also be able to trade other holdings in the DFM portfolios, despite one of the holdings being suspended.