The investment manager Neil Woodford has revealed plans to launch a new firm less than two years from the implosion of his last company following a string of bets that went wrong.
In a dramatic return for the former star stock picker, Woodford proposed to open a new investment firm, Woodford Capital Management Partners, which would be based in Jersey and focus on advising on investments for professional investors rather than retail clients.
The planned return to investing comes at a time when the findings from an investigation by the Financial Conduct Authority, the UK regulator, into the collapse of his previous vehicle – the Woodford Equity Income Fund – are yet to be published. A spokesperson for the regulator declined to comment on the investigation.
Setting out his plans after more than a year of public silence, Woodford used an interview in the Sunday Telegraph to say he was “very sorry for what I did wrong” in charge of his last independent venture, but rejected criticism of his management style and argued he could have saved investors money if the fund had not been forced into liquidation.
The new firm will draw fees for advising on biotechnology assets Woodford originally bought before the collapse. They are now owned by Acacia, a New York-listed company that bought the shares last year and which is intending to use them as the foundation on which to rebuild the Woodford investing operation.
Woodford’s previous investment company collapsed spectacularly in October 2019 following months of turmoil when investments did not perform as hoped. The administrator Link Fund Solutions then wound down the fund, returning money to many investors at a steep loss.
Woodford, who earned dividends worth millions of pounds from the firm shortly before its collapse, said he had been forced to sell his main home, a farm in the Cotswolds worth £30m, in the aftermath of the closure.
Woodford had risen to become one of the most prominent investors in Britain, earning the moniker “the Oracle of Oxford” after 25 years at Invesco Perpetual. Strong returns from his stock-picking had garnered him a significant following among retail investors and savers, allowing him to start his own investment business in 2014.
The company he founded ran assets worth £16bn in 2017, but by October 2019 the assets in his main fund had fallen to £3.1bn, after big pension funds lost confidence in Woodford and withdrew their money.
Some of the investments Woodford chose included stakes in poorly performing companies such as Provident Financial, a high-cost lender targeting poorer customers, the estate agent Purplebricks and the litigation finance firm Burford Capital.
He also chose to invest in frontier technology companies with unproven revenue prospects, including a highly speculative venture to try to pioneer nuclear fusion at low temperatures and a series of biotechnology companies. Furthermore, he faced criticism for investing in private, unlisted companies, which made it difficult to sell them when some clients withdrew their money.
“I’m very sorry for what I did wrong,” he said. “What I was responsible for was two years of underperformance – I was the fund manager, the investment strategy was mine, I owned it, and it delivered a period of underperformance.”
However, Woodford also criticised Link Fund Solutions, which suspended the funds he ran and then decided to wind down the funds. Those decisions were “incredibly damaging to investors”, Woodford said, because they forced it into a fire sale of assets below what he believed was their true value.
Woodford plans to return to investment with Craig Newman, who served as chief executive of Woodford Investment Management, headquartered in an Oxford industrial park.
Woodford did not want the 2019 collapse to be the “epitaph” of his career, he said, although he said: “You can imagine lots of people who have read the media about me wouldn’t want to touch me with a 10-foot disinfected bargepole.”
If he were to return to running retail money he would not stray far from large listed companies whose shares can be easily sold to meet investor redemptions, Woodford said.
Link Fund Solutions was approached for comment.