Woodford under fire over new role: Disgraced money man is now advising the US fund that bought his assets at knockdown prices
Neil Woodford faces calls to open up about his new role with a US firm that bought stocks from his collapsed fund at knockdown prices.
The disgraced investor has relaunched his career by acting as an ‘adviser’ to Acacia Research on the stocks once held in his Equity Income fund.
The fact he is teaming up with Acacia – where backers include activist investor Starboard Value, whose boss Jeff Smith has been dubbed ‘the most feared man in corporate America’ – has raised eyebrows in the fund management world.
Disgraced fund manager Neil Woodford has relaunched his career by acting as an ‘adviser’ to Acacia Research on the stocks once held in his Equity Income fund
And it has angered critics at a time when the Financial Conduct Authority is investigating how the Woodford empire collapsed in 2019 and left hundreds of thousands of savers nursing heavy losses.
One British fund manager said he could not work out why Acacia, an experienced investor in the life sciences sector, would pay the fallen star for his services.
The manager, who wished to remain anonymous, said: ‘It doesn’t pass the sniff test very well in terms of how people would view it.
‘If Woodford wants to profit from running those assets in part you think: ‘Hmm, it doesn’t sound very good. I can’t understand why Acacia would want to hire him either.’
The comments came as it emerged that:
- The US arm of Woodford’s former employer Invesco is the second-largest investor in Acacia.
- Katharine Wolanyk, a managing director at Burford Capital – a company where he held a stake – sits on the board of Acacia.
- WG Partners, a bank which worked with Woodford on several deals, brokered the sale of Equity Income assets to Acacia.
- Clifford Press, Acacia’s boss, approached Woodford in December just weeks before their partnership was announced.
Jeff Smith, the boss of activist investor Starboard Value, has been dubbed ‘the most feared man in corporate America
The relationships show just how deep the stock-picker’s ties run. The Mail is not suggesting any wrongdoing. A spokesman for Woodford said he and Press did not know each other at the time Acacia agreed to buy assets from the collapsed fund last summer.
But one source described Press as a ‘bit of an anglophile’ who was so intrigued by the fund manager’s story that he decided to get in touch.
When Woodford revealed his role with Acacia last weekend, Press said: ‘I’ve met a few of the really legendary investors, and when I met Neil I knew I was standing in the presence of a truly exceptional investment manager.’
In late 2019 Starboard agreed to provide Acacia up to £290million to use for investments and acquisitions, working with it to spot opportunities.
Smith, who famously locked horns with then-Yahoo! boss Marissa Mayer in 2016, has led a string of campaigns for a strategic rethink at companies such as Ebay and pizza chain Papa John’s.
Tory MP Kevin Hollinrake said the Acacia deal reminded him of so-called ‘pre-packs’, when business owners put their firm into administration to get rid of debts, having already agreed to buy it on the other side.
He said: ‘It smacks of a pre-pack when Woodford’s crashed and burned and lost money for investors, then comes out smelling of roses with some kind of new contract advising on elements of the same fund.
Offer: Clifford Press, Acacia’s boss, approached Woodford in December just weeks before their partnership was announced
Transparency is very important, especially when there’s still an investigation by the regulator going on.’
He said Woodford should explain how he landed the deal, what exactly he would do for Acacia, and what he would earn.
Investors in Equity Income were dismayed last year when biotech stocks from the fund were sold to Acacia for £224million, well below the price they had been valued at, by Link, which was winding up the fund and quickly trying to raise money to return to investors.
Acacia almost immediately sold some stocks, generating a bumper profit. But it held on to several, many of which have since jumped in value.
Woodford’s own former investors missed out on all these gains, worth around £185million.
Jack Starmer, who had more than £5,000 invested, said: ‘Woodford should let the dust settle, and he shouldn’t be trying to capitalise on his mistakes.’
Woodford declined to comment. Acacia did not respond to a request for comment.