THE NEIL WOODFORD STORY: WHERE DID IT ALL GO WRONG?
Part 1
MATTHEW FEARGRIEVE discusses the failures of UK fund manager Neil Woodford, and the implosion of his multi-billion dollar investment funds.
In this, the first of a three-part blog, Matthew describes the background of management hubris and regulatory failings that laid the ground for the catastrophic outcome that lay ahead…
The Woodford Equity Income Fund (“WEIF”) was placed into liquidation in October 2019, after having suspended redemptions in June. The fund had been managed since its 2014 inception by Neil Woodford, an investment manager widely credited with “star” status following a successful career in the City. Fast-forward five years and Woodford’s funds are in wind-down, Woodford is removed as the manager, and his reputation is in ruins. This, the first part of a two-part blog, offers some reflections on this saga, and its implications for the future of UCITs for investors.
Seeds of disaster. WEIF was structured as a UCITs, a retail-friendly, regulated product that is open-ended and strictly required by the regulatory regime to permit investors daily liquidity. Note those two words: daily liquidity. They would come to haunt Woodford and his investors. The regulatory regime permits managers of UCITs to place long-only bets on liquid stocks. But Woodford’s…
