Wood­ford, part­ner take £13.8m div­i­dend

The Punch - - INTERNATIO­NAL BUSINESS -

NEIL Wood­ford and his busi­ness part­ner took £13.8m in div­i­dends from their in­vest­ment man­age­ment com­pany last year, just months be­fore the im­plo­sion of its main fund, which has left 300,000 in­vestors nurs­ing large losses.

It is un­der­stood that Wood­ford col­lected twothirds of the div­i­dend, which brings the to­tal pay­out for the for­mer star stock-picker and his part­ner Craig New­man to £112m since 2014, The Guardian re­ported on Tues­day.

At least 300,000 in­vestors re­main trapped in the Wood­ford Eq­uity In­come fund, which was suspended in June last year. last month the ad­min­is­tra­tors wind­ing up the fund told in­vestors they have lost nearly a fifth of their money and that sell­ing the re­main­ing as­sets is prov­ing more dif­fi­cult than ex­pected.

Wood­ford faced a bar­rage of crit­i­cism for con­tin­u­ing to charge man­age­ment fees af­ter the sus­pen­sion but was un­re­pen­tant. In the ful­lyear ac­counts is­sued on Tues­day, the com­pany sug­gested that press cov­er­age was as much at fault for the fund’s demise as Wood­ford’s poor stock­pick­ing.

“Un­der­per­for­mance in the fund com­bined with a pe­riod of sus­tained and neg­a­tive press cov­er­age” had re­sulted the wave of re­demp­tions by in­vestors, it said.

Moira O’neill of in­ter­ac­tive in­vestor, the in­vest­ment plat­form, said: “This is a sad re­minder, yet again, that when things go wrong, it is al­ways the in­vestor left pick­ing up the pieces – in this case, 300,000 of them. It will rub salt in the wounds of those wor­ried about their se­cu­rity and com­fort in re­tire­ment.”

A Wood­ford spokesper­son said, “The ac­counts re­late to the fi­nan­cial year be­fore the eq­uity in­come fund was suspended. We can con­firm that the part­ners did not take any prof­its or in­come dur­ing the fund’s sus­pen­sion nor was any man­age­ment fee earned from man­ag­ing Wood­ford Pa­tient Cap­i­tal Trust.”

Wood­ford’s flag­ship fund was once worth more than £10bn but fell be­low £3bn as in­vestors rushed to with­draw their money af­ter a se­ries of poorly per­form­ing stock picks, in­clud­ing online es­tate agent Pur­ple­bricks, fi­nance firm Bur­ford and doorstep lender Prov­i­dent Fi­nan­cial.

The fund’s ad­min­is­tra­tors, link Fund So­lu­tions, could not find a way to main­tain the core Wood­ford Eq­uity In­come fund as an on­go­ing en­tity. But the re­port and ac­counts cov­er­ing the year to end March 2019, signed off by Craig New­man a month af­ter the fund’s sus­pen­sion, de­scribe Wood­ford In­vest­ment Man­age­ment as meet­ing its “key per­for­mance in­di­ca­tors”, which “showed that the com­pany per­formed in line with ex­pec­ta­tions”.

It added that “mea­sures have been taken to re­shape the busi­ness in light of the re­duced rev­enue ex­pec­ta­tions with a view to re­main debt free and with no in­ten­tion or need to raise cap­i­tal from other sources”.

The col­lapse of the Wood­ford fund is re­garded by some as the big­gest in­vest­ment scan­dal of the past decade, and has re­ver­ber­ated across the fund man­age­ment in­dus­try. Fi­nan­cial ad­viser har­g­reaves lans­down now faces a raft of le­gal ac­tions from dis­grun­tled in­vestors who bought in to Wood­ford as it was on the firm’s in­flu­en­tial “best buy” list.

Wood­ford’s once-stel­lar rep­u­ta­tion as a stock­picker lies in tat­ters, but in­vestors were left stunned last month by a Bloomberg re­port which said Wood­ford and New­man had flown to China to test in­vestor ap­petite for a po­ten­tial come­back.

It re­ported that the duo were hav­ing “ex­ploratory meet­ings with in­vestors in­ter­ested in early-stage as­sets”.

Prob­lems with illiq­uid early-stage as­sets were at the heart of many of the per­for­mance prob­lems with the Wood­ford fund. Af­ter the Wood­ford fund sus­pen­sion, Bank of Eng­land gov­er­nor Mark Car­ney said in­vest­ment funds that in­clude illiq­uid as­sets but al­low in­vestors to take out their money when­ever they like were “built on a lie” and could pose a big risk to the fi­nan­cial sec­tor.

Photo: AFP

•L-R: French Fi­nance and Econ­omy Min­is­ter, Bruno Le Maire; and Euro­pean Union Com­mis­sioner for Trade, Phil Ho­gan, at a press con­fer­ence in Paris ...on Tues­day.

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