- ‘Woodford Views’ aims to offer readers an alternative to ‘consensus thinking’
Neil Woodford returns
Neil Woodford has re-emerged with a newsletter that claims to offer readers an alternative to “consensus thinking”, just a week after the former fund manager’s understanding of risk management was criticized by the City watchdog.
Woodford Investment Management imploded in 2019 after its £3.7bn fund collapsed as investors rushed out en masse amid a sustained period of underperformance.
The collapse of Woodford Equity Income left some 300,000 investors stranded and having to wait five years to be compensated with a fraction of the capital they had entrusted to the fund manager.
Now Woodford has turned to Instagram, X and a newly launched website to help readers “navigate the complexities of the financial markets.”
Last week, the Financial Conduct Authority, which has yet to adopt any formal sanctions against Woodford, said it had a “flawed and unreasonably limited understanding” of its responsibility in managing “liquidity risks” – the need for power convert assets into cash. .
It is unclear how or if Woodford intends to profit from his latest venture, which follows the failure of a new fund business, WCM Partners, in 2021.
In his first post on Woodford Views, he said: “You may remember me as the fund manager who avoided the dot-com bubble and banking crisis and outperformed the index for over 25 years, or perhaps as the fund manager “disgraced” fund manager who presided over the collapse of Woodford Investment Management in 2019.
Others may not have heard of me at all. Whatever your perspective, you may be curious to know what I have to say about a wide range of economic, social and political issues that affect our daily lives.’
He added that much of the UK’s economic commentary is “rich in opinion but critically short in data”, suggesting this is “because established narratives are too willingly accepted”.
Woodford said: “Economic analysis and commentary on Woodford Views will focus on relevant facts and data without censorship by editors, pressure to follow a particular line or consensus thinking.”
Why did Woodford Investment Management collapse?
Neil Woodford had a successful 25-year career when he was employed by Invesco, where his funds amassed billions of pounds in investments from both retail and institutional investors thanks to excellent returns.
When it became independent in 2014, investors naturally followed the Woodford Patient Capital Trust, the Woodford Income Focus fund and, crucially, the Woodford Equity Income Fund (WEIF).
WEIF’s initial good run was followed by two years of poor performance, exacerbated by exposure to smaller – sometimes unprofitable – companies and unlisted stocks.
Over time, larger investors, such as Kent County Council Pension Scheme, began withdrawing large amounts of money.
Others followed suit and the fund’s large exposure to illiquid assets meant it could not sell assets quickly enough to cope with capital outflows, leading manager Link to force its suspension.
St. James’s Place later terminated Woodford’s contract to manage three of its funds.
The decision to shut down WEIF entirely in October 2019 left many investors out of money and ultimately led to the demise of Woodford Investment Management.
Only now are investors receiving compensation.