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Former fund manager Neil Woodford has said he is not “a villain” and blamed the collapse of his investment firm in part on economic and political issues in the wake of Brexit.
Woodford, whose fund company Woodford Investment Management collapsed in 2019, said in a new blog that he hoped to shed light on the events that led to his fund’s demise.
The downfall of his firm, which trapped thousands of investors and left them nursing heavy losses, “will always weigh heavily on me”, he added. His firm managed more than £10bn for investors at its peak.
“I have spent the last five years reflecting on the reasons why,” he said. “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.”
However, Woodford said he believed he was not “worthy of the onslaught that followed the failure of my business”.
His comments come just days after the UK financial regulator said Woodford had a “defective” understanding of markets and liquidity — the ability of the fund to sell assets and allow investors to withdraw their cash at short notice.
The Financial Conduct Authority ruled last week, after a lengthy probe into the debacle, that Woodford’s “unreasonably narrow understanding of his responsibilities for managing liquidity risks” ultimately led to the fund’s collapse.
Woodford’s flagship £3.7bn Equity Income fund came unstuck as a result of the manager’s poor stock picks as well as his sizeable exposure to unquoted and smaller companies, which are less liquid than large stocks and difficult to sell when investors leave the fund.
Woodford said in his blog: “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.”
Woodford made his name at Invesco as one of the UK’s best-known retail investment managers before he set up his eponymous firm.
He said in his blog that although he had experienced “difficult” periods of investment performance before, “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”.
He added: “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.”
Woodford declined to comment.
