Star stock picker Neil Woodford's investment empire collapses

15 October 2019, 08:06 | Updated: 16 October 2019, 08:53

All of the funds once managed by top stock picker Neil Woodford are to be wound up, it has been announced.

Following the closure of Mr Woodford's flagship fund on Tuesday, the investor said that he had made the "highly painful decision" to close his remaining two funds.

They would be wound down in "an orderly fashion", he added.

"I personally deeply regret the impact events have had on individuals who placed their faith in Woodford Investment Management and invested in our funds," Mr Woodford said in a statement.

The flagship Woodford Equity Income Fund, which was suspended earlier this year, will not be re-opened, the company managing the fund said. It confirmed that Mr Woodford had been dismissed following a series of botched investments.

But Mr Woodford, who built up a reputation to become Britain's best-known fund manager, criticised the decision by Link Asset Services.

Link said it was taken "with a view to returning cash to investors at the earliest opportunity".

It said, in a letter to investors, that Mr Woodford would cease to be the investment manager of the fund.

His name will be removed from the fund as well as its parent company, the Woodford Investment Fund.

Mr Woodford said: "This was Link's decision and one I cannot accept, nor believe is in the long-term interests of LF Woodford Equity Income Fund investors."

At its height in 2017, the Woodford Equity Income Fund had a value of over £10bn but by the time of its suspension in June this had reportedly sunk to as low as £3.7bn.

The decision to block savers from accessing their cash over the summer followed an exodus of investors.

Link had previously advised that this would continue until December but on Tuesday it announced that the decision had been taken to close it instead.

"We recognise that this will come as a disappointment to some investors," the company said.

"However... we have concluded that the winding up of the fund is now in the best interests of investors."

The winding up will begin on 17 January, following a three-month notice period.

Cash will start being returned from the end of January, but only in instalments.

Adrian Lowcock, head of personal investing at Willis Owen, said: "We have seen the complete demise of the most famous fund manager the UK has seen for years.

"Investors knew the scenario was bad but the indication from Woodford thus far had been that the fund would reopen.

"Sadly many people will be looking at significant losses."

Mr Woodford launched his investment business after building up a reputation for delivering stellar returns while at Invesco Perpetual.

He was criticised over his strategy since setting up the fund due to his preference for investing in businesses not listed on the stock market.

Potential returns from such unlisted companies can be far higher than from traditional shares, but the investments can be much harder to sell on.

Rules dictating that funds should hold only 10% of investors' funds in unlisted businesses can be circumvented by creating a listed fund that is made up of all the unlisted parts.

The suspension of the Woodford fund has prompted questions about the oversight of such investment vehicles by the Financial Conduct Authority.