The scale of stricken money manager Neil Woodford’s poor performance was laid bare on Monday, as Woodford apologised once again to investors who are stuck in his flagship fund.
Woodford, once one of Britain’s most revered investors, was forced to suspend withdrawals from his flagship Equity Income Fund in June. It came after he invested in private stock that he was unable to shift quick enough when investors asked to withdraw money.
The gating of the fund has left thousands of investors, many of them ordinary savers, trapped in the fund. £3.7bn of assets are locked in.
Link Asset Services, which oversees the Equity Income Fund, reiterated in a letter to investors on Monday that Woodford’s fund would continue to be frozen until at least December. The administrator also confirmed that Woodford’s investments have continued to perform poorly during the freeze, heaping more misery on trapped investors.
The value of the Equity Income Fund has declined by 12.8% since withdrawals were stopped in June, Link said. That compares to a 4.2% rise in the FTSE all share index over the same period.
In a separate statement on Monday, Woodford Investments apologised once again to investors.
“We are very sorry for the continued suspension and understand the concern it will be causing investors,” the company said.
“We remain fully committed to getting the fund into a position that delivers the best possible outcomes for our investors – for those who wish to withdraw their money from the fund when it reopens and for those who wish to stay.”
Woodford blamed the significant recent underperformance on its investment in Benevolent AI, a private tech business using AI for medicine discovery. The company recently halved its valuation from $2bn to $1bn in a funding round that significantly dented the value of Woodford’s stake in the business.
Woodford Investments said on Monday that its namesake CEO “continues to reposition the portfolio founded on a belief that the global economic environment is not as robust as equity markets are implying.”
Woodford also defiantly told investors it will continue to charge management fees on the frozen funds “to cover the infrastructure and resource costs associated with running an actively managed fund.”
Woodford has been heavily criticised for continuing to charge fees and has been accused of sailing “close to the wind” in the run up to the freeze.