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.
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.