Woodford closes investment firm

Woodford closes investment firm

Neil Woodford is closing his investment firm after being fired from his flagship fund this morning.

The former star manager was fired from the suspended Equity Income fund this morning (October 15) as the decision was taken to wind down the fund. 

He then walked away from his remaining two investment vehicles later in the evening before confirming to FTAdviser's sister paper the Financial Times that he had taken the decision to close Woodford Investment Management.

He told the paper: “We have taken the highly painful decision to close Woodford Investment Management.

“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 Equity Income was suspended on June 3 following a period of sustained outflows. Mr Woodford has since been scrambling to sell off assets to free up liquidity but this morning Link, the authorised corporate director of the fund, announced that the fund will close, and that Woodford Investment Management is no longer the manager.

Mr Woodford protested the decision, saying “this was Link’s decision and one I cannot accept, nor believe is in the long-term interests of LF Woodford Equity Income fund investors.”

This evening the board of the Woodford Patient Capital Trust announced that, in light of recent events, Woodford Investment Management Limited has served notice to terminate its portfolio management contract with the trust.

In a statement to the stock exchange it said: "During its three-month notice period, WIM has committed to work collaboratively with the board and its advisers throughout this transition period in order to protect the interests of shareholders.

"The board is in advanced discussions in relation to the ongoing management of the company's portfolio and expects to be in a position to announce details of the new management arrangements shortly."

In response to the closure of WIM Ryan Hughes, head of active portfolios at AJ Bell, said: “The closure of Woodford Investment Management had a feeling of inevitability about it.  

"Without the fees from the Equity Income fund and with no performance fee coming from the Patient Capital Trust, it was difficult to see how the business could survive."

He added: “This creates further uncertainty for a larger number of customers and the key now is that they are given information about what is going to happen to their investments as soon as possible.

"The board of the Patient Capital Trust has clearly been considering its options already and I’d expect to see an announcement very soon from them."

Adrian Lowcock, head of personal investing at investment platform Willis Owen, said: “Following the news this morning the future of Woodford Investment Management was bleak. The decision to close the company is unfortunately the right one as it will put a stop to the inevitable speculation. ”