Woodford, partner take £13.8m dividend
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.
•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.