By Tom Winnifrith, the Nemesis of Neil Woodford | Tuesday 15 October 2019
Disclosure: I own shares in one or more of the stocks mentioned. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
Link, the ACD, to Neil Woodford’s flagship Equity Income Fund has, after liaising with the FCA, announced that the fund will not be un-gated, allowing investors to redeem units in December, but will instead be wound down. And Neil Woodford’s Woodford Investment Management has been fired with immediate effect. That is the death knell for it. Our extensive warnings, in more than 1000 podcasts and articles since 2015, HERE are now utterly vindicated, Neil is finished.
Link had agreed to give Woodford until December to sell all of his unquoted and illiquid assets and reposition the fund in cash and blue chips so that investors could again buy and, more importantly, sell units. We have repeatedly warned that Woodford would struggle to sell his illiquid and unlisted investments at anything other than pennies in the pound
However, after consulting with the FCA, Link states in a letter to investors, below, “Whilst progress has been made in relation to repositioning the Fund’s portfolio, this has unfortunately not been sufficient to allow reasonable certainty as to when the repositioning would be fully achieved and the Fund could be re-opened.”
Fund management giant Blackrock has been asked to sell all the liquid investments and the proceeds from that exercise will be returned to unit holders as soon as the end of January. Meanwhile specialists at PJT partners will try to sell the unlisted and illiquid investments but this will take some time so the proceeds from that may not be returned to unit holders for months or even longer.
This is a sensible solution and the only practicable one. I cannot see why the FCA and Link dithered for so long in making it, allowing Neil more time to mismanage the portfolio and earn £65,000 a day in fees for doing so.
So what next? Woodford Investment Management is left being paid to mis-manage just one fund, the Income Focus Fund. Its NAV is now just over £250 million and will be swamped with redemptions. How soon before it is gated? Meanwhile Woodford Investment Management will, as of today, see its fee income (from IFF) slump to less than £2 million per annum. It cannot hope to cover its costs from that and no-one else will trust Neil to manage money so it is only a matter of time before IFF is also put into wind-down or merged with another fund and before Woodford Investment Management goes bust.
Over at WPCT they are yet to fire Woodford but that is surely only a matter of time now. Woodford Patient Capital Trust has massive problems of its own as we have exposed in a major new report out today.
The FCA, meanwhile, will now be under real pressure to investigate how the man dubbed Britain’s Buffett by fawning journalists, notably at the Mail on Sunday, has cost investors billions. And to explain why four years of warnings from this website went unheeded. If only to divert attention from its own failings, the FCA must surely now start a full enquiry into Mr Woodford whose City career is over but whose antics do border on the criminal.
Meanwhile as promoters of all things Woodford such as the Daily Mail, the Sunday Times and Hargreaves Lansdown prepare their excuses, enjoy our four years of explicit warnings HERE. It is a Champagne day for ShareProphets.
This area of the ShareProphets.com site is for independent financial commentary. These blogs are provided by independent authors via a common carrier platform and do not represent the opinions of ShareProphets.com. ShareProphets.com does not monitor, approve, endorse or exert editorial control over these articles and does not therefore accept responsibility for or make any warranties in connection with or recommend that you or any third party rely on such information. The information available at ShareProphets.com is for your general information and use and is not intended to address your particular requirements. In particular, the information does not constitute any form of advice or recommendation by ShareProphets.com and is not intended to be relied upon by users in making (or refraining from making) any investment decisions.
Search ShareProphets |
Stock market news |
Recent Comments |
Site by Everywhen