What Neil Woodford did next

What Neil Woodford did next

The day the dream died for Neil Woodford was an overcast Thursday in October 2019.

At 4pm on October 14, shock engulfed the offices of Woodford Investment Management as they realised it was all over.

It was at that time of day, just as the UK markets closed, that Link, the fund’s authorised corporate director, fired WIM as manager of the Equity Income fund.

The key executives at WIM, Mr Woodford and chief executive Craig Newman, had not expected to lose the mandate, but when the news arrived, they knew the business was gone.

Mr Woodford held 65 per cent of the shares, and Mr Newman 35 per cent.

Key Points

  • The curtain came down on Mr Woodford’s business in October last year.
  • He had been trying to sell the illiquid investments that caused the problems. 
  • Mr Woodford is now talking about getting a consortium together to buy back the illiquid stocks.

That exit brought to a close months of turmoil, as outflows had forced the suspension of the flagship Equity Income Fund in June 2019. 

With the income from that fund lost, and the company earning no regular fee for managing the Patient Capital trust, the only revenue the business could expect was the fee from the tiny Woodford Income Focus fund. 

The decision was made straight away to close the business, and the next morning, Mr Woodford and Mr Newman told almost all of the staff gathered at the company’s office that their positions were being made redundant, with three months’ notice. 

They had resigned as managers of the Woodford Income Focus fund and Patient Capital trust, but on all three mandates there were notice periods to be served, taking the company up to Christmas, with all staff working intensely. 

The notice periods for the bulk of the staff ended in January.

In December, shorn of most of its staff and all of its clients, WIM formally exited its headquarters in Oxford and moved to a serviced premises. 

Mr Woodford and Mr Newman are still working there, along with a couple of operations people and none of the sales people who had brought the business to assets under management of more than £10bn.

Although no sales people remain at the company, Mr Newman remains as chief executive and his background is in sales, having met Mr Woodford initially at Invesco Perpetual, where Mr Newman had risen to become head of sales. 

Since the effective closure of the company, former star fund manager Mr Woodford has been doing what most financial services professionals do when they are out of a job: meeting up for coffee with old contacts, some of them contacting him, he contacting them, but with few firm plans. 

One of the trips, in early December, was to China, to catch up with investors in that country with whom he had worked in the past on early stage investments. That meeting came following a previous encounter earlier in 2019 with investors based in the Middle East. 

On the personal front, a house in Salcombe, Devon, that Mr Woodford owns was undergoing extensive renovation, while his children are still relatively young.