Woodford crisis sends shock waves through markets

++THE FUND GURU WHO FELL TO EARTH++

THE downfall of Neil Woodford sent shock waves through the stock market as shares tumbled in companies linked to the once-feted fund manager.

The 59- year- old ( pictured) stunned ordinary savers and the City by blocking withdrawals from his flagship Woodford Equity Income fund after the market closed on Monday.

The move triggered a brutal reaction yesterday as regulators faced calls to step in and industry experts said Woodford was having ‘a dark and terrible moment’.

Shares in another of his funds, the listed Patient Capital Trust, plunged as much as 20pc as investors lost faith in the fallen star. It closed 7.2pc down at an all-time low of 71p.

Fund supermarket Hargreaves Lansdown and wealth manager St James’s Place, which have billions of pounds of their clients’ money invested with Woodford, also saw their shares slam into reverse.

Hargreaves fell 4.6pc but St James’s Place reversed early losses to end slightly higher. A host of companies held in the Equity Income fund fell as investors braced for Woodford to sell shares to free up cash for savers seeking to withdraw money.

Among those worst-hit were drugs company Circassia, where Woodford has a 28pc stake.

Technology investor Allied Minds, where he holds 27.4pc, also took a battering as did online mattress seller Eve Sleep, where he owns 46.8pc of the stock. Circassia closed down 8pc, Allied Minds was 6pc lower and Eve Sleep fell 5.5pc.

Neil Wilson, analyst for Markets, said Woodford’s investments in firms such as construction firm Kier and doorstep lender Provident Financial had been a disaster, adding: ‘Things look like they will get worse. He has clearly made a series of poor investment decisions.’

Investment expert Daniel Godfrey said Woodford was ‘one of the finest fund managers that Britain’s ever produced, although clearly he is having a dark and terrible moment’.

The Equity Income fund looked after £10.2bn at its peak in May 2017 but now holds just £3.77bn of savers’ cash following withdrawals and a slump in the value of investments held.

Woodford has banned savers from withdrawing cash for at least 28 days ‘in the best interests of all investors’, giving him time to reorganise the fund. The Pensions and Lifetime Savings Association urged regulators to step in, with its expert Joe Dabrowski saying: ‘The concern is that pressure builds and matters escalate further or uncontrollably, which would not be helpful for anyone.’

The Financial Conduct Authority, the City watchdog, said it was ‘in contact with the firms involved to ensure actions undertaken are in the best interests of all investors.’