Hundreds of thousands of investors are facing huge losses after the investment empire run by disgraced fund manager Neil Woodford crumbled to dust last night.
Legions of people who entrusted their life savings to Britain’s most feted stock-picker suffered a crushing blow yesterday as they learned his flagship £3billion Woodford Equity Income fund will be wound down.
Savers had been locked out of Equity Income since June 3 after increasing numbers of investors pulled out their money amid concerns over Mr Woodford’s flagging performance.
Legions of people who entrusted their life savings to Britain’s most feted stock-picker suffered a crushing blow yesterday as they learned his flagship £3billion Woodford Equity Income fund will be wound down
He froze the fund to give himself time to sell shares so he could meet the demand for withdrawals – and it had been expected to reopen it December – but it has become increasingly clear that would not happen.
And after being fired from that main fund, Mr Woodford last night dramatically quit the other two funds which bear his name – Patient Capital Trust and Income Focus. This twist followed an evening board meeting in which he was expected to be sacked anyway.
Savers who invested when the fund was at its peak in June 2017 have already seen 40 per cent wiped off their nest eggs, meaning a £10,000 investment would now be worth about £6,000. They were warned last night they will get significantly less as the costs of winding up the fund and selling its assets are deducted.
As savers who trusted Mr Woodford face an agonising wait to see what is left, MPs hit out at the veteran fund manager for raking in £63million from his doomed investment empire over the past four years despite his poor performance.
There was also condemnation for the £8.8million in fees that his Oxford-based firm, Woodford Investment Management, has taken from helpless investors in just over four months since banning withdrawals from Equity Income.
Richard Batchelor has little confidence he will get much of his £2,000 investment back and has accused fund manager Neil Woodford of being ‘arrogant and unsympathetic’.
The former printing company owner, 66, and his wife Kitrina, 67, had about £300,000 in a personal retirement plan, and about £2,000 of this was invested in Equity Income in 2010, on the recommendation of his then-financial adviser.
Mr Batchelor, who lives in Ferndown, Dorset, welcomed the news Mr Woodford had been sacked as fund manager. The father-of-two said: ‘Neil Woodford has been very arrogant and unsympathetic throughout this whole process. I am glad he has been sacked but it should have happened a lot sooner.
‘He’s lost all credibility. I would never again put money into anything which has even been associated with Neil Woodford.’
Gabriel Herbert, a financial services worker, had around £18,000 invested in Equity Income, but withdrew £8,000 on the advice of colleagues shortly before it was suspended in June.
Miss Herbert, 64, from London, said: ‘This was a fund where ordinary people invested money. I invested as soon as it opened, mainly because Hargreaves Lansdown was promoting it so much and hailing Woodford as a star investor. It should have been suspended and wound up before it lost as much money as it did.’
Campaigners said his fall from grace – after a hugely successful career as a stock-picker at US giant Invesco – has highlighted the ‘wildly excessive fees’ charged by supposedly ‘superstar’ fund managers.
In a statement last night, Mr Woodford, whose main home is a £13.7million mansion in Gloucestershire, said: ‘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.’
Last night, Baroness Altmann, a former pensions minister, said the huge fees generated by Mr Woodford’s company ‘add insult to injury’ for savers and described the 59-year-old’s downfall as a ‘wake up call for regulators’ to provide better protection for investors.
Equity Income savers face waiting up to a year to get back what is left of their investments as the fund is wound down and all its assets in various companies are sold off.
At its peak the fund was worth £10.2billion, which has now fallen to around £3billion. It has lost around £700million since the lock-in period was imposed to give Mr Woodford enough time to dispose of shares he had bought in difficult-to-sell assets, such as obscure companies which are not listed on the stock exchange.
Fund supervisor Link Fund Solutions said last night the assets would be sold by American investment firms Blackrock and Park Hill, and insisted this would lead to a ‘better outcome for investors’ than