Demise of a Famous Stock Picker

St James’s Place delivers devastating blow to Neil Woodford

Wealth manager St James’s Place has terminated its £3.5bn relationship with Neil Woodford, in a devastating blow that leaves Britain’s best-known fund manager fighting to save his business.


The decision — which wipes out 40 per cent of Mr Woodford’s assets under management — continues a disastrous week for the famed stockpicker, who was forced to freeze his flagship fund on Monday to halt an investor exodus.


FTSE 100-listed St James’s Place, Britain’s largest wealth manager with more than £100bn of funds under management, said it was ending its two decades-long association with Mr Woodford and giving the mandate to Columbia Threadneedle Asset Management and RWC Partners to “ensure its clients’ investments continue to be managed effectively”.

Ben Yearsley, director at Shore Financial Planning, said: “This is getting close to the point of being terminal for Woodford Investment Management.”

A spokesman for Mr Woodford declined to comment.

This week’s events were triggered by Kent County Council trying to withdraw a £266m investment mandate from Mr Woodford’s Equity Income Fund, his company’s flagship £3.7bn vehicle.


https://www.ft.com/content/b98e75c4-8792-11e9-a028-86cea8523dc2

Neil Woodford broke the ground rules — now investors will pay the price

Is the fallen ‘star’ fund manager a victim? Hardly. He’s made a fortune in recent years


There are rules in fund management. You learn them pretty early in your career. They aren’t complicated, but they are important.

Don’t take on too much money, particularly in small-caps. Don’t think it’s all about you. Don’t mix or dramatically change styles. Don’t own too many illiquid stocks. Don’t overtrade.

You can, of course, break these rules — all good stock market stories come with a maverick. But that simply makes the last rule the most important: if you break the rules, don’t mess it up. Because almost all bad stock market stories also come with a maverick who messed it up.

And so to Neil Woodford. In 2014 he branched out from a much-feted career at Invesco to launch a new company with the backing of his supporters at Hargreaves Lansdown, the UK’s biggest investment platform company.


The hype was huge. Mr Woodford launched an investment trust, Patient Capital, with the idea of investing in small and exciting companies to hold for the long term, an Equity Income Fund, an Income Focus Fund and a super snazzy website with lots of stuff about him on it (“widely regarded as one of the finest investors of his generation”, etc, etc).



https://www.ft.com/content/6520fff2-8792-11e9-97ea-05ac2431f453

https://ichef.bbci.co.uk/news/660/cpsprodpb/7F82/production/_107224623_woodford1pilston.jpg

The shocking blocking of redemptions from Neil Woodford's, £3.7bn Woodford Equity Income Fund - after serial underperformance led to an investor exodus - is still sending shockwaves across the US asset management arena two days after it was first reported.

"I can’t remember anything quite like this" said Peter Walls, veteran manager of the Unicorn Mastertrust fund, after trading in Woodford's fund was suspended. "I mean going back over decades really, there were quite a few funds that just didn’t pick up the telephone and suspended dealing in the dark days of the crash of '87 and black Monday and all that but this is quite big stuff," he said in an interview with CityWire.

As we reported on Monday, redemptions from Woodford's flagship fund were suspended yesterday to allow the manager "time to reposition the element of the fund's portfolio invested in unquoted and less liquid stocks, in to more liquid investments."


https://www.zerohedge.com/news/2019-06-05/i-cant-remember-anything-quite-35-billion-fund-drops-woodford-devastating-blow