ALEX BRUMMER: Neil Woodford is a shameless egotist who simply must be stopped
The return of Neil Woodford to investment management just 18 months after the crash of his £15billion empire – leaving as many as 500,000 ordinary savers nursing big losses – will be a source of anger and astonishment nationally.
And the idea that anyone should have sympathy for this self-serving egotist because he felt compelled to sell his £30million Cotswolds estate – with its stable of show-jumping horses – in the aftermath of the collapse is risible.
Yet in his interview in the Sunday Telegraph, a lachrymose Woodford lashes out at everyone except himself – before shamelessly promoting his new venture.
He acknowledges that many people wouldn’t touch him with a ‘ten-foot disinfected barge pole’ – and he’s right.
How on earth can someone who has done as much harm to Britain’s savings culture make such a rapid return to investment management?
Savers who lost out – including this writer – are still waiting for an explanation as to why regulators failed to intervene as the Woodford empire headed for the buffers in the spring of 2019.
The full and urgent inquiry demanded by both the Commons Treasury Select Committee and the Treasury itself has yet to happen.
Meanwhile, the Mail’s requests to the City regulator, the Financial Conduct Authority, for updates on the state of its probe have, so far, met with a stonewall.
For more than two decades at City giant Invesco Perpetual, Neil Woodford was regarded as an investment genius, having turned £1,000 into £25,000 for those savers who stuck with him for a generation.
So it was not surprising that when he struck out on his own in 2014, his empire grew fast.
That growth was aided and abetted by the unquestioning backing of investment platform Hargreaves Lansdown which exposed a third of its nearly one million clients to Woodford.
As his own boss, there were few constraints on where Woodford invested client money. He piled into unpopular quoted shares, such as doorstep lender Provident Financial, and dozens of unknown start-ups in biotech and science-based companies despite having unproven expertise in this area.
When the performance of his investments failed to live up to expectations, shrewd investors rushed to get their money out.
A crisis was triggered in June 2019 when Kent County Council’s pension fund sought to withdraw £250million from the Woodford fund.
The cash wasn’t there and the fund was frozen. The Council and its pensioners took a hit of £63million, and hundreds of thousands more were suddenly unable to access their money.
In his first interview since the collapse, Woodford, 60, accuses the administrator, Link Fund Solutions, of acting too hastily in suspending trading in his flagship Woodford Equity Income Fund and closing it down.
If anything, Link and the FCA acted too slowly. Action should have been taken as soon as cash started to flood out.
Woodford behaved like a gambling addict who thinks that his luck will turn but runs up bigger losses. At the peak of his troubles in 2019, he tried a series of desperate gambits to keep his funds from breaching regulations.
He dumped unquoted investments from his main fund into his Patient Capital fund at over-ripe prices.
He also supported the decision of some of the biotech firms in which he was invested to float on the virtually moribund Guernsey stock market.
This enabled Woodford to count them as liquid, easyto-dispose-of assets. But so suspicious was the Guernsey exchange that it notified the FCA.
Now, the big question for savers, who have lost at least 25 per cent of their money in the main Woodford Equity Income Fund, is how on earth can someone who has done as much harm to Britain’s savings culture make such a rapid return to investment management?
An FCA verdict is still required on Woodford’s personal culpability and the roles of Hargreaves Lansdown and wealth management adviser St James’s Place which sent so much money in the failed guru’s direction.
Indeed, the lack of urgency and intervention by the FCA itself has still to be established. One thing is certain: the FCA and the Bank of England, which is responsible for financial stability, cannot allow Woodford to return to active advice and management.
Incidentally, at the time of the Woodford implosion, the chief executive of the FCA was one Andrew Bailey who has since moved on to greater things as governor of the Bank.
Just last week Bailey found himself entangled in a disagreement with former Appeal Court Judge Dame Elizabeth Gloster over his share of responsibility for the collapse of the smaller mini-bond firm, London Capital & Finance, with 11,000 investors.
But to return to Woodford.
He and his associates say they will only be dealing with ‘professional investors’ not ordinary retail savers in their new venture.
The distinction is ridiculous. Professional investors, such as pension funds and insurance companies, are harnessing our money.
Woodford and his cohort must be stopped before they cause more damage.
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