Neil Woodford had humble origins, but built an enthusiastic following among retail investors by promising to make them rich. Now, they'd just like their money back.
If the signs of hubris were there five years ago, "the fall from grace of the one-time star stock-picker" is now "almost complete", says the Financial Times. Neil Woodford has apologised to investors whose savings remain "gated" in his flagship fund, but his reputation, carefully honed over 30 years, is in tatters. "He's a has-been," remarks a senior player in the industry. What a comedown for someone described by the BBC in 2015 as "the man who can't stop making money", says The Observer. Woodford's descent from "bright star to black hole" makes Icarus look like a slouch.
Speed has always been part of the Woodford story, says the Daily Mail. He is, after all, "a frustrated fighter pilot" who "stumbled into the fund-management game almost by accident". His background could hardly be described as privileged. Raised in Berkshire, where he attended Maidenhead Grammar, his father earned a living printing postcards. Woodford, says the Financial Times, "lamented" his father's lack of ambition. His own first career choice was the Royal Air Force, but he failed the pilot aptitude test. "My reaction speeds were just not fast enough," he later recalled.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Heading for Exeter University instead, he took a degree in economics and agricultural economics and arrived in the City in 1981 in the midst of a recession. "With little money in his pocket, he slept on his brother's floor while he flitted through various jobs at the Reed Pension Fund, TSB and Eagle Star" before bagging a role at Henley-based Invesco Perpetual in 1988.
When Woodford started out, he was given £14m to manage; by the time he left Invesco, he was running £24.1bn. His investment style was long-termist and he prided himself on ignoring the siren "noise" of the market. That led to some good calls. Woodford shunned the dotcom bubble a move that nearly cost him his job and dumped shares in banks long before the 2008 crisis hit. "With his rugby-player's build and penchant for black sweaters and jeans," Woodford "never looked much like the archetypal City fund manager," says the FT. "Based in a dreary Oxfordshire industrial park, he might have passed as a dressed-down entrepreneur, or a fitness coach." Yet for more than 20 years he delivered on his mission "to make Middle England rich" attracting a rock-star-like following from savers, financial advisers and, later, popular investment platforms. Within two weeks of launching his own fund in 2014, he'd pulled in £1.6bn a British record.
A passion for horses and fast cars
If Woodford's intention was to "cash in on his enthusiastic retail following", it was a resounding success. Over the past four years, even as his bets have soured, he has paid himself some £63m, says The Observer a sum that must particularly nark those still paying fees for the privilege of being gated in his fund. Friends say he is "decidedly unflashy" and it's "difficult to fathom where the money goes". But a lot seems to go on horses. Woodford's second marriage, to the amateur show jumper Madeleine White, has inspired "an expensive new hobby" together they've built a vast equestrian complex near their home in the Cotswolds. His other passions are fast cars and racing bicycles.
Woodford's supporters claim he is a victim of fickle investor sentiment "he took a road less travelled", says one: "events conspired against him". Well, maybe. But the savers of Middle England would just like their money back.
-
Water companies blocked from using customer money to pay “undeserved” bonusesThe regulator has blocked three water companies from using billpayer money to pay £1.5 million in exec bonuses
-
Will the Bitcoin price hit $100,000?With Bitcoin prices trading just below $100,000, we explore whether the cryptocurrency can hit the milestone.
-
Neil Woodford’s back – but has he really learned anything?Opinion Disgraced fund manager Neil Woodford is planning a comeback. But he doesn’t seem to have learned much from his many mistakes. So why would anyone invest with him now?
-
Neil Woodford’s back – but sometimes sorry isn’t enoughAdvice Neil Woodford’s funds blew up in 2019. Now he is on the comeback trail. But his apologies are unconvincing.
-
Woodford investor? Your first payment is coming soonNews Private investors left stranded by the collapse of the Woodford Equity Income fund will soon be getting at least some of their money back. But they will have to wait a while longer to see how much more – if any – they will receive.
-
Neil Woodford continues to cast a shadow over his successor at InvescoFeatures Mark Barnett, former star manager Neil Woodford’s successor at Invesco, has applied the same formula, and is struggling.
-
Is it time to buy Patient Capital Trust?Features Neil Woodford’s Patient Capital Trust has been taken over by asset manager Schroders. The share price has surged - but should you buy in? John Stepek looks at the trust’s prospects.
-
Neil Woodford: no silver lining for his investorsEditor's letter Neil Woodford made every mistake it is possible to make as a money manager. And his investors have been stiffed. But however wrong it all went, Woodford never stopped taking the fees.
-
Woodford believed his own hype – now his investors are paying the priceFeatures Neil Woodford was once one of the brightest stars in Britain’s investment firmament. Then he came crashing down to earth. John Stepek explains what went wrong.
-
Woodford’s empire collapses – what happens to his investors now?Features With Neil Woodford getting his marching orders and his funds being shut down, John Stepek explains what it means for his former empire, and for those with money locked in.
