‘I no longer believe in star managers’

Twelve months after Neil Woodford was forced to suspend his flagship Equity Income fund, and later close down his investment business, investors are still waiting for around £500m of their savings to be returned to them.

More than 300,000 investors are still waiting for a third of their money back, as the fund – valued at £3.7bn when it was suspended in June last year – has yet to be fully wound up.

There are fears that the remaining unlisted assets could be worthless by the time a buyer is found, adding to investors’ losses. Selling the stocks as the country heads into a recession means even more value could be wiped off as buyers demand bigger discounts.

Before a string of misplaced bets caused the fund to implode, it had amassed more than £10bn. Those who stuck with the once feted manager to the bitter end are still reeling.

Nicholas Heleine, 55, an engineer from Cambridge, invested £50,000 with the manager, including some of his wife’s life savings, and lost more than £20,000. He said his dream of early retirement had been crushed and he would now have to work longer to make up the damage.

He said he would find it harder to help support his son, who is studying at university in America, where tuition fees are especially high.

“It’s certainly changed the way I invest,” he said. “I no longer believe in the idea of the ‘star fund manager’ and that one guy can beat the market. I’m putting most of what I have left in the markets into passive tracker funds.”

It was easy to see why investors trusted the manager with their hopes, dreams and hard-earned cash. At his peak in 2015 Mr Woodford had turned £10,000 into £45,000 since the start of the century, whereas the market had returned only £18,000. By the time he was fired in October last year this was down to £26,000 – almost the same as what investors would have made from a cheap and basic tracker fund.

Laura McNair, 45, said she expected to lose up to 70pc of the £20,000 she had invested in Mr Woodford’s fund as a nest egg for her two children.

“It was supposed to be a gift for them to put towards university fees or a deposit for a flat. Sadly that won’t be possible now,” said Mrs McNair. Her investment fell in value to £15,000 before the fund was suspended and she has been told she will get between 40pc and 50pc of that back.

Her husband, Paul, said he feared the family could lose even more. “The value of the portfolio has diminished so much,” he said.

The couple said as a result of the scandal they had moved their money from Hargreaves Lansdown, Britain’s largest investment shop, which had close ties to the ruined stock picker, to Interactive Investor, a rival.

Hargreaves Lansdown repeatedly came under fire for heavily promoting the doomed fund in its influential best-buy lists at the same time as its own managers were reducing their exposure to Mr Woodford by selling units held by Hargreaves’ own multi-manager funds.

“We didn’t like the way Hargreaves promoted the fund while cutting its own exposure to it. That left a sour taste,” said Mr McNair.

Brian Sargent, 80, has also lost a large chunk of a nest egg he was setting aside for his daughter. He invested £4,100 in the fund in 2015. He is supposed to get back around three quarters of the money he put in but said he was not hopeful of that outcome.

“I wanted it to be a nice gift for her, but it went badly wrong,” said Mr Sargent. “I’ve already received around £2,500 and should get £600 more but I’m not confident I’ll ever see it.”

He said he was nervous about reinvesting the money although the debacle had not put him off “star” managers. He has decided to move the funds into Finsbury Growth & Income, an investment trust run by Nick Train, another well-known investor.

“He has a good track record – but then again so did Mr Woodford at first,” Mr Sargent said.

One year on, investors have not recovered from Neil Woodford’s demise, write Harry Brennan and Marianna Hunt ‘I’m not confident I’ll ever see my money again’