Nick Train has lamented about the “regrettable” tarring of Hargreaves Lansdown’s brand after the implosion of the Woodford Equity Income fund but said he will “wait and see” what happens next.
The Finsbury Growth & Income trust manager (pictured) opened up about the D2C business, which has become one of his more controversial holdings over its ties with Neil Woodford, at a roundtable event at the Association of Investment Companies.
Hargreaves was a consistent cheerleader of Woodford Equity Income, which suspended on 3 June and will be wound up early next year, promoting the fund in its Wealth 50 favourite funds list and multi-manager range despite having concerns about the level of unquoted and hard-to-sell assets since late 2017.
More than 133,769 of its clients remain trapped in Woodford’s fund and law firms Leigh Day and Slater and Gordon are investigating whether there is a legal case to be made against the platform group.
‘Something most regrettable has happened’
Train lamented the “regrettable” turn of events over the summer and said the Woodford saga had “unquestionably” left a mark on Hargreaves’ brand in the near-term. But he added he would “wait and see” what happens next before making a decision.
“Hargreaves Lansdown is a formidably profitable, formidably cash rich company that delivers what’s evidently a very valuable service to many, many of its customers,” he said.
“Something most regrettable has happened that unquestionably has affected at least the short-term value of that franchise.
“And we’ll wait and see what further developments break.”
Since Woodford’s fund was suspended on 3 June Hargreaves’ shares have seen 16% shaved off their value. They are now trading at £18.62 a share, down from their peak £24.33 in May.
In the immediate aftermath of the Woodford scandal Train lost £150m from the reputational blow to Hargreaves’ share price.
As of 2 July 2019, he was the largest shareholder in the D2C firm with a 12% stake in the business. Hargreaves made up 6.9% of Train’s £1.8bn Finsbury Growth & Income trust at the end of October.
Finsbury Growth & Income underperformed in October for the second month in a row with its share price falling 5.5% versus the FTSE All Share’s losses of -1.4%.
