Former fund manager Neil Woodford, whose Woodford Equity Income fund suspended redemptions and locked up more than £3.5bn of investors’ money five years ago, said does not think he was “worthy of the onslaught” that followed the collapse of Woodford Investment Management in a blog post published yesterday (17 April).
‘Woodford Views’, a blog website set up by the manager, was created to provide his views across economic, social and political issues.
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In particular the UK economy, as he believes “much of the commentary… is long on opinion but critically short on data”.
“It is often factually wrong, perhaps because established narratives are too willingly accepted,” he wrote. “What is clearly severely lacking is data-supported information and analysis.”
Experience
Woodford said his 35 years of industry experience means he has “witnessed economic and corporate failure”, referencing the fact he has previously been described by the media as “the man who made Middle England rich” and “Britain’s answer to Warren Buffett”.
“In contrast, the failure of Woodford Investment Management in 2019 fed an altogether different narrative, transforming me from a hero to a villain in the eyes of many,” he wrote.
“With respect to my story, the truth is that I am neither hero nor villain. I was never the financial saviour of Middle England, but then, neither do I think I was worthy of the onslaught that followed the failure of my business.
“There is much more to be revealed about the story, and I will shed some light on the events that led to the losses that investors suffered when the fund was wound up. However, regardless of who was responsible for what, the fact is investors were trapped in my fund and suffered permanent losses, and this will always weigh heavily on me.”
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Woodford described his firm, Woodford Investment Management, as having three “very successful years” before it underwent “a difficult period of investment performance”.
“I had experienced this before in my career, but this time, my underperformance led to events that I was not able to control, ultimately resulting in the closure of the business at the end of 2019.”
Woodford also stated his investment principles remained the same after he left Invesco to set up shop, despite widespread criticism that he moved from investing in UK dividend-paying mega caps, to illiquid university spin-outs.
“And yet, the outcomes were very different,” he said. “I have spent the last five years reflecting on the reasons why. The things beyond our control at Woodford, such as the economic and political landscape, were, of course, very different in the wake of the Brexit vote, as were the investment environment and other externalities. What my colleagues and I could control at Woodford was also quite different.
“Nevertheless, the outcomes diverged dramatically, and what followed has given me the opportunity to think long and hard, both professionally and personally. As much as I would not choose to relive that extremely challenging time, I learned much from it and believe that going through it has given me important and valuable insights, which will help inform my analysis and commentary.”
