Fund manager Neil Woodford ‘knew he was toast’ as he took as much as he could from savers

Fund manager Neil Woodford ‘knew he was toast’ as he took as much as he could from savers, says top investor

  • Peter Hargreaves accuses Woodford of running an investment operation ‘probably inadequate for purpose’ 
  • Believes Woodford refused to bow to pressure to suspend fees on a flagship fund
  • The extraordinary outburst from Hargreaves comes days after Woodford was deposed as manager 

The founder of one of the City’s top investment firms has launched a scathing attack on Neil Woodford (pictured) 

The founder of one of the City’s top investment firms has launched a scathing attack on Neil Woodford, the star fund manager whose business shut last week, taking the cash of thousands of investors with it.

Peter Hargreaves accuses Woodford of running an investment operation ‘probably inadequate for purpose’, pours doubt on his stock- picking skills, and says he invested in unquoted businesses without sufficient knowledge.

He also believes Woodford refused to bow to pressure to suspend fees on a flagship fund – Equity Income – after it was suspended in June because he ‘knew he was toast and took as much money as he could, anticipating the demise of his business’.

The extraordinary outburst from Hargreaves, who launched investment platform Hargreaves Lansdown from a bedroom in 1981 and oversaw its rise to a FTSE-100 company, comes days after Woodford was deposed as manager of the £2.9 billion Woodford Equity Income fund.

It followed a disastrous performance run and the fund’s suspension in response to a flurry of investor withdrawals that could not be met because Woodford had bought shares he could not sell quickly enough.

Woodford has also quit from distressed investment trust Woodford Patient Capital and is standing down from managing his third fund, Income Focus. Like Equity Income, it was suspended last week.

It has left Oxford-based Woodford with no choice but to close his business, Woodford Investment Management, that he founded in 2014 after building a reputation as a top manager in the 2000s.

In an exclusive interview with The Mail on Sunday, Hargreaves says: ‘Was he [Woodford] a great stock-picker? With the benefit of hindsight, I am not sure.

Peter Hargreaves (pictured) accuses Woodford of running an investment operation 'probably inadequate for purpose'

Peter Hargreaves (pictured) accuses Woodford of running an investment operation ‘probably inadequate for purpose’

‘It appears he didn’t have the knowledge in unquoted companies and rarely a week went by without him being steeped in various problems.

‘The crux of the matter was his organisation was probably inadequate for purpose – couldn’t cope with the billions that poured in from investors.’

Hargreaves also claims Woodford’s strategy of buying under-valued stocks no longer worked.

‘He hadn’t recognised the world is significantly different,’ he says.

‘Many cyclical stocks won’t recover – they will gradually fade out of business. The investment scene and world economy is greatly changed.’

Hargreaves Lansdown, where Mr Hargreaves is a shareholder but no longer an employee, could be fined for its role in heavily promoting Woodford Equity Income despite having concerns over its portfolio.

Yesterday, Woodford said he appreciated that many people in the financial industry wished to express their views. He added: ‘I am sorry, and I personally deeply regret the impact events have had on The Mail on Sunday readers who placed their faith in Woodford Investment Management and invested in our funds.’



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