Neil Woodford’s empire collapsed around him yesterday as he lost all three of his funds and declared he will shut down his firm entirely.
Just hours after being sacked from his flagship Equity Income fund, the 59-year-old quit as manager of Patient Capital Trust and his third vehicle, Income Focus.
Shares in Patient Capital hit new lows as he was overtaken by events.
Neil Woodford’s fund empire has collapsed around him as he lost all three of his funds
The move on the trust came after a meeting of the its independent board, led by chairman Susan Searle. The board was set to fire the fallen manager, the Mail understands, and Woodford decided to jump before he was pushed.
Shares in Patient Capital fell 8.6pc, or 3.25p, to 34.4p, taking losses since its peak to 71pc.
The departure from all three funds has triggered the collapse of his Woodford Investment Management firm after just five years.
Income Focus was Woodford’s third offering, launched in March 2017. It initially pulled in £553m from savers. At its peak in October 2017, it was worth £747m. Last night it was valued at just £253m.
Many of the companies held by the Income Focus fund were also held by the Equity Income fund.
Like its big brother, it has also been suspended now to ‘protect investors’ as administrators consider their options.
Traders now know that Blackrock, which is winding down the Equity Income fund, will sell its holdings as quickly as possible.
Many of the companies held by Woodford’s Income Focus fund were also held by the Equity Income fund
So as Blackrock begins its fire sale, this will likely drag down the value of the Income Focus fund further. Both funds are overseen by Link Fund Solutions.
The demise of his firm, which at one stage employed 85 staff, puts 30 jobs at risk.
Christopher Brown, an analyst at JP Morgan Cazenove, said: ‘This debacle has destroyed Neil Woodford’s reputation,’
Adrian Lowcock, head of personal investing at Willis Owen, said: ‘This is truly shocking. We have seen the complete demise of the most famous fund manager the UK has seen for years.’
Woodford said: ‘I personally deeply regret the impact events have had on individuals who placed their faith in Woodford Investment Management and invested in our funds.’
The collapse follows a period of dire performance for all three of his funds. Woodford Patient Capital Trust shares have fallen nearly 66pc since they floated on the London Stock Exchange in 2015.
Anyone who invested £1,000 at the launch would now be sitting on just £344. Investors can still buy or sell the trust’s shares, but if they sold right now they would crystallise a heavy loss.
Woodford has never taken a fee for managing the Patient Capital Trust, as its performance was too poor. The trust’s board said last night: ‘In light of recent events, Woodford Investment Management Limited has today served notice of termination in relation to its role as portfolio manager.’
It said the board was ‘in advanced discussions’ with prospective new managers, but did not say whether the new team would keep the trust running or sell its assets to return cash to investors.
Woodford had been trying to cling on to his business since his main fund was frozen in June but has been unable to turn it around
Woodford must now serve his six-month notice period at the Income Focus fund, and three – month spell at the Patient Capital Trust, before closing down his entire fund management empire, Woodford Investment Management.
He had been trying to cling on to his business since June, when Link suspended his Equity Income fund after he ran out of cash to repay savers fleeing for the exit.
He had hoped to reopen the fund in December, after selling some of its holdings, but Link decided yesterday that this would not be possible.
AJ Bell’s Ryan Hughes said: ‘The closure of Woodford Investment Management had a feeling of inevitability about it. It was difficult to see how the business could survive.’ JP Morgan’s Brown said the best outcome for investors in the trust would be to put it into an ‘orderly run-off’, as is happening with the Equity Income fund.
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