Neil Woodford’s back – but sometimes sorry isn’t enough

Neil Woodford’s funds blew up in 2019. Now he is on the comeback trail. But his apologies are unconvincing.

Neil Woodford
Neil Woodford: tearful, defiant, not sorry enough
(Image credit: © Shutterstock)

“I’m very sorry for what I did wrong,” former star fund manager Neil Woodford tells The Sunday Telegraph’s Lucy Burton. It’s less than two years since his fund management business collapsed. That happened because a) he was underperforming and b) when investors got fed up with that, and jittery about some of his other holdings, and went to withdraw their money, it turned out that he was too heavily invested in stocks that couldn’t be sold in a hurry. As a result, his funds were frozen. The ensuing firesale of illiquid (defined below) assets compounded the losses investors had already suffered. Many are still waiting for money to be returned. Now he hopes to make a comeback – hence the “tearful and defiant” broadsheet interview.

What does history suggest about penitent fund managers? Investment platform Interactive Investor compiled a list of five UK managers who’ve felt the need to apologise to investors in the past, and looked at what happened next. Anthony Bolton, who was almost as famous as Woodford, retired on a high in 2007 from Fidelity Special Situations. He returned in 2010 to head up Fidelity China Special Situations, but dented his reputation with a weak performance (and unusually high fees). He apologised publicly in 2011, but by the time he re-retired in 2014, performance was still nothing to shout about (though the fund went on to do well – and trimmed its fees).

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free
https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

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

Sign up
John Stepek

John Stepek is a senior reporter at Bloomberg News and a former editor of MoneyWeek magazine. He graduated from Strathclyde University with a degree in psychology in 1996 and has always been fascinated by the gap between the way the market works in theory and the way it works in practice, and by how our deep-rooted instincts work against our best interests as investors.

He started out in journalism by writing articles about the specific business challenges facing family firms. In 2003, he took a job on the finance desk of Teletext, where he spent two years covering the markets and breaking financial news.

His work has been published in Families in Business, Shares magazine, Spear's Magazine, The Sunday Times, and The Spectator among others. He has also appeared as an expert commentator on BBC Radio 4's Today programme, BBC Radio Scotland, Newsnight, Daily Politics and Bloomberg. His first book, on contrarian investing, The Sceptical Investor, was released in March 2019. You can follow John on Twitter at @john_stepek.