Fallen fund manager Neil Woodford has unveiled plans to launch a new investment venture, a move which is unlikely to win favour with the investors who lost money when his flagship fund collapsed in 2019. 
In his first interview since shutting the doors of Woodford Investment Management, Woodford (pictured) apologised for the events that lead to the collapse of his investment empire but laid much of the blame on administrators Link Fund Solutions.
“I'm very sorry for what I did wrong,” he told The Sunday Telegraph. “What I was responsible for was two years of underperformance - I was the fund manager, the investment strategy was mine, I owned it and it delivered a period of underperformance.”
However, he argued that his portfolio – which had suffered from a run of losses, was undergoing heavy outflows and was pushing the limit of its exposure to unquoted companies – would have come good if Link had decided to keep the fund open.
“I can’t be sorry for the things I didn’t do,” he said. “I didn’t make the decision to suspend the fund, I didn’t make the decision to liquidate the fund. As history will now show, those decisions were incredibly damaging to investors, and they were not mine. They were Link’s decisions.”
Performance of fund vs sector and index between launch and decision to wind down
Source: FE Analytics
Link decided to wind down LF Woodford Equity Income – which peaked in size at around £10bn but had shrank to £3bn when it was shut – in mid-October 2019. Woodford then stepped down from his LF Woodford Income fund and Woodford Patient Capital trust, and closed Woodford Investment Management.
“I thought I never, ever want to be near the fund management industry again, but they say time is a healer,” he told The Sunday Telegraph.
“I didn’t want what happened to me in 2019 to be the epitaph of my career, I didn’t want it to be the full stop. I’m not trying to rebuild an ego, I just felt I wanted to continue to do the things that I believe in. I don’t think I’m qualified to do anything else. You can imagine lots of people who have read the media about me wouldn’t want to touch me with a 10-foot disinfected bargepole.”
According to the newspaper, Woodford is preparing to launch Woodford Capital Management Partners with former Woodford Investment Management chief executive, Craig Newman. The Jersey-based firm will only deal with professional investors and will focus on the biotech sector.
However, the news will not be welcomed by all.
Ryan Hughes, head of active portfolios at AJ Bell, said: “The news that Neil Woodford is looking to make a comeback will come as a surprise to many, especially those thousands of embattled investors who are still waiting to get the last of their money back. With around £200m of money still stuck in his previous fund and original investors back in 2014 sitting on losses of over 25 per cent and many thousands who invested later suffering much bigger losses, there will be little sympathy for Woodford and the comments he made in his recent interview.
“While some investors may well agree with Woodford’s view that investors would have been better off if his fund was not forced to suspend and liquidate, others will simply be glad that they have got some of their money back after being stuck for many months and will want to finally move on from this sorry saga.
“The potential new investment vehicle looks like it will be aimed at professional investors only with the investment approach once again focused on niche, higher risk, potentially illiquid investments that Woodford had such conviction in for his previous fund. While he may well be right that there are some great companies to invest in, his track record showed that it is very hard to identify them and many need years of funding before they become successful, with plenty falling by the wayside along the way.
“Ultimately, it looks as if Woodford is looking for vindication that his original investment strategy was correct all along. While he has acknowledged that a fund for retail investors would look very different today to the one he previously ran, by focusing on professional investors, he clearly hopes that much of the emotion and fury that he has faced over the past two years will disappear. However, given the broader damage in trust and confidence that this whole affair has caused to the investment industry, it looks unlikely that investors of any kind will find it so easy to forget.”