If hubris could be bottled, Neil Woodford’s latest video appearance would keep a bottling plant busy for years. During a 90-minute interview on his own Woodford Views online vlog, the ex-fund manager – once heralded as a genius of UK equity income investing – showed the same self regard that arguably caused the collapse of his once mighty empire more than five years ago.
His flagship fund, Woodford Equity Income (WEI), launched in 2014, reached £10 billion before shrinking to £3.7 billion ahead of its suspension in June 2019. Its subsequent break-up months later left hundreds of thousands of fund investors out of pocket – even after an inadequate £230 million financial redress scheme was organised by the City regulator, the Financial Conduct Authority.
In the video, recorded in Dubai, Woodford, 64, looked as fit as a butcher’s dog, firing shot after shot at those he felt responsible for the demise of his investment fund.
He directed blame at regulators, the media, Link Fund Solutions (WEI’s supervisor) and even Brexit during his teary-eyed recounting of events leading to the suspension of WEI.
Missing from the narrative was any meaningful acknowledgment of his own key role in the tragedy – most glaringly, his decision to invest a significant portion of the fund in highly illiquid companies.
This deviation was at odds with the mandate of a UK equity income fund, which traditionally prioritises stable, dividend-paying stocks. Investing in such ‘boring’ stocks was how Woodford achieved great success at Invesco, his previous employer, and how he was able to go on and create his own investment brand.
The blame game: Neil Woodford during his video interview
Alan Miller, co-founder of the investment house SCM Direct, has long helped me analyse issues with Woodford’s funds – besides WEI, there was Patient Capital (PC) and Woodford Income Focus (WIF). Miller’s view is that the sheer size of WEI’s illiquid investments made it almost impossible for Woodford to navigate any prolonged period of underperformance.
Last week, he told me: ‘Had he managed Woodford Equity Income with a similar liquidity profile to his former funds at Invesco, Woodford would probably still be managing money today.’
A symphony of self-pity
Listening to the video on Friday, there wasn’t one ounce of remorse on offer from Woodford and no use of the word ‘sorry’ – other than when he shed tears talking about the moment he told staff at his Oxford-based investment operation that the show was over and he had to fire them.
Fine, and genuine, but it would have been nice if he had also shed a few tears for investors.
His video’s title, The Darkest Five And A Half Years Of My Life, aptly encapsulated the tone – poor Neil, wronged by the world.
But what about those who lost everything, including retirees who depended on his promise of steady investment returns? A simple apology might have gone a long way.
Instead, Woodford stuck to the script of victimhood, pointing fingers in every direction but his own. Delusional? Maybe.
The Barrage of blame
Instead, Woodford went on the attack, launching a scathing assault on various parties who he felt were responsible for the end of WEI and the loss of WIF and PC to rival investment groups. In the interview, Woodford:
- Accused the regulator of foisting Link upon it when WEI was launched;
- Stated that Link’s decision to suspend the fund in June 2019 was done without consultation (‘It was a shock’);
- Described Link’s subsequent move to wind up Woodford Equity Income in September 2019 as a ‘disaster for our investors’ and the ‘worst outcome’;
- Criticised the regulator for ignoring his plea to stop Link from killing the fund and for refusing to get involved;
- Complained about the unfairness of the subsequent investigation into both his conduct and that of his wider investment company. With appeals, the results of this regulatory work may not be known for three years. ‘Painful,’ he described it. ‘We didn’t do anything wrong.’ Really? I’m sure most WEI investors would dispute that comment.
As for the media, Woodford accused it of ‘demonising people [like him]’ and ‘making a lot of stuff up’. He also claimed that by portraying him as having lost his investment touch during the fund’s poor performance (2017–2019), the press influenced institutional investors, such as Kent County Council, to redeem their investments – an action that forced Link to suspend the fund, signalling its collapse.
Yet, glaringly absent was any explanation for his decision to allocate substantial portions of the fund to illiquid stocks, which became nigh-on impossible to sell during WEI’s underperformance. This move turned the fund into a slow-motion car crash.
The flawed bid for a comeback
My side of the story: Woodford was talking to host Spencer Lodge (pictured)
The interview also offered a window into Woodford’s desire for a comeback, with comparisons to investment titans such as the legendary Warren Buffett. He claimed the lessons of the past five years had made him a better investor, ready to rebuild his legacy.
But as one comment on YouTube succinctly put it: ‘No amount of post hoc explaining can wipe away the mess you made and the damage you caused while simultaneously making tens of millions [of pounds] for yourself.’
Woodford’s hubris during the fund’s heyday, coupled with his inability to recognise his own fallibility, remains central to his downfall. Had he managed liquidity risks and portfolio structure more prudently, he might still be managing money today – even if his performance had faltered.
Instead, by overreaching into speculative territory, he created a fund that could not withstand external shocks.
A missed opportunity for answers
The sycophantic nature of the interview, which was hosted by the Dubai financial hotshot Spencer Lodge, left many glaring questions unanswered.
Why didn’t the interviewer press Woodford on the illiquid investments in his fund? Or challenge him about the fees charged to investors while the fund was suspended?
Why didn’t Lodge demand accountability or even a simple acknowledgment from Woodford of the distress caused to ordinary investors in his fund?
As Woodford continues to evade responsibility for the downfall of his investment empire, I return to the comments made by viewers of his video. They strike a resounding chord.
‘Neil, you’re not going to get your old reputation back,’ wrote one. ‘Slightly ridiculous, you can’t shift blame,’ said another.
For those who lost money in the Woodford debacle, the interview provided little solace – just a reminder of the hubris that brought down one of the UK’s most celebrated fund managers.
Woodford’s story is a cautionary tale of what happens when unchecked self-belief meets poor decision-making.
As Alan Miller aptly observed on Friday: ‘It’s not just about financial management – it’s a study in psychology. Unless Woodford finds genuine humility, his bottles of hubris will accompany him to his investment grave.’
Finally, if you’ve watched the video or plan to do so in the coming days, do tell me what you think of it. Don’t hold back, even if you think Woodford is right to feel hard done by? Contact me at [email protected]
Ps: Merry Christmas to all you lovely readers. I adore you, even when you tell me off for bashing the unions or our current inept Government.
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