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Star manager returns

Woodford plans comeback with biotech fund

Neil Woodford

Sorry: Neil Woodford apologised for fund collapse

Neil Woodford, whose fund collapsed spectacularly in 2019, is aiming to resurrect his career with a new Jersey-based venture.

Woodford Capital Management Partners will focus on the biotech, British biosciences and healthcare sectors.

Initially it will focus on raising money from professional investors, which tend to adopt more long-term strategies.

The Woodford Equity Income Fund crashed in June 2019 after a run of poor results led to a loss of faith among investors.

As the former ‘star manager’ and his team had bought stakes in so many unlisted companies, selling the assets proved difficult.

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The fund shrank from a reported £10.2 billion to £3.7bn and was wound up.

Link Fund Solutions, which sold off assets to return cash to investors, began paying out last January.

In an emotional interview with The Sunday Telegraph Mr Woodford said he did not want events in 2019 to be “the epitaph of my career”.

He said the new fund would not be putting ordinary investors’ cash into illiquid start-ups.

He told the paper: “If you’re going to run retail money these days you can’t have an investment strategy that tilts a portfolio too far away from a very liquid, very FTSE mid-250 portfolio.

“If I was running retail funds in future I wouldn’t mingle unquoted assets in a retail fund.”

Equity income funds are normally bought into by amateurs who ask a fund manager to invest their cash into a variety of businesses.

Mr Woodford said he warned Link Fund Solutions against closing the fund and said had investors stuck with him they would be “enjoying the fruits of that faith”.

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Saying he was “very sorry for what I did wrong”, he added: “I can’t be sorry for the things I didn’t do. 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.”

Ryan Hughes, head of active portfolios at AJ Bell, said Mr Woodford’s return will not be universally welcomed, particularly by those still waiting the return of their funds.

“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% 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.

“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.”



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