Woodford Concerns

AnotherJoe

Prism wrote: »

I'm not excusing the recent performance but you got to remember that people have been invested with Woodford for well over 20 years and it was only summer 2017 that things started to go south. The current Woodford fund launched mid 2014 and did reasonably well until that point. Back then it was more FTSE 100 focused (GSK, Astra Zeneca, Imperial Brands etc) but something caused him to sell all that big and just focus on the smaller illiquid stuff.

Woodford was the manager at Invesco but he had rational adults making sure he didn't do crazy stuff and keep him on the rails. Once the constraints were released his true ability was quickly made very clear.

talexuser

I was just pointing out that describing everything Woodford has done as an unmitigated disaster is clearly not true since a very large number of people have profited well ahead of the equivalent market over a long time through his funds.

The above does not excuse the recent debacle in any way, and is no comfort to those unfortunate enough not to have got out in good time after all the warning signs, (the invested money shrank by billions from peak by plenty of people taking money out to go elsewhere) but nevertheless remains a fact.

I had a top performing fund implode years ago to half its value, that was actually a fraud which closed down the long standing and well respected fund house eventually, the manager actually turned up to court in women's cloths and claimed mental breakdown. I was well diversified so a couple of years down the line it didn't matter much. These things can happen and are part of the risks you take in the market and in active management.

Malthusian

AnotherJoe wrote: »

Reminds me of the comment in a Theranos* documentary where they refer to the board which is stuffed full of people like Kissinger, Schultz (ex US sec of State), Mattis (retired general), Roughhead (retired Admiral) and someone quipped "the board was well placed to advise on how to invade Vietnam , less so than on if this technology could work"

From where I'm standing they were considerably better at venture capital investment than invading Vietnam.

At least nobody died in Theranos (<-- said the guy who can't be bothered to check wiki for whether anyone shot themselves or got poisoned by a dirty fake needle)

talexuser wrote: »

I had a top performing fund implode years ago to half its value, that was actually a fraud which closed down the long standing and well respected fund house eventually, the manager actually turned up to court in women's cloths and claimed mental breakdown.

If it happened today they'd name him in the Top 50 Women in Finance

AnotherJoe

Malthusian wrote: »

From where I'm standing they were considerably better at venture capital investment than invading Vietnam.

At least nobody died in Theranos (<-- said the guy who can't be bothered to check wiki for whether anyone shot themselves or got poisoned by a dirty fake needle)
Unfortunately its very likely that some did, people whose blood tests were totally 180deg wrong. Many cases caught after a second diagnosis but some must have slipped through. Note this wasnt edge cases where you might disagree on what a result meant, they were plain wrong.

Tough call. At least some got out of Vietnam alive. None of the money that went into Theranos did.

Perhaps it would be fair to say they were equally adept at conducting a war in Vietnam and validating blood testing technology

Moe_The_Bartender

Update from Citywire:

Neil Woodford has lost an estimated £113 million from writedowns to Woodford Equity Income's heavy holdings in unquoted companies since the turn of the year, amid scrutiny of the valuations employed by the suspended fund.

Woodford Equity Income's interim report, published late on Friday, shows a series of writedowns to unquoted stocks. Nearly all of the stocks are also held by the Woodford Patient Capital (WPCT) investment trust.

Among the most significant cuts is to the valuation of Benevolent AI, the fund's largest unquoted holding. Woodford Equity Income has lost £19.4 million from a 10% trimming of the valuation. Benevolent AI accounted for 5% of the fund's portfolio at the end of June.

The fund lost £16.6 million on its investment in early stage investor Ombu, as the valuation was written down by more than a third.

These writedowns are however surpassed by the estimated 40% cut to the valuation of Industrial Heat after the period covered by the interim report, which will have knocked around £45 million off the £3.1 billion fund's value.

Woodford listed his stakes in all three of those companies on Guernsey's stock exchange in order to avoid Woodford Equity Income breaching a 10% limit on unquoted company investments.

After Citywire revealed Woodford's manoeuvre, Guernsey's stock exchange suspended his shares in those three companies and delisted them in June.

A timeline of correspondence between Guernsey's stock exchange authority and the Financial Conduct Authority in the run-up to Woodford Equity Income's suspension shows Guernsey repeatedly raising concerns over the valuation of Woodford's stocks with the City regulator.

Woodford Equity Income's interim report also confirms the near-halving of the fund's valuation of biotech company Immunocore, first revealed by Citywire in June. Woodford Equity Income has suffered a £21.3 million hit on its investment in the company, which has fallen from £44.7 million at the end of last year to £23.4 million at the end of June.

Nearly £4 million has meanwhile been wiped off the value of the fund's holding in pharmaceutical company Viamet.

Other significant writedowns include Woodford Equity Income's £5.3 million hit on its stake in next generation battery developer Nexeon, whose valuation was slashed by almost two-thirds.

The fund's stake in Cambridge biopharma business Kymab was written down by £2.8 million, despite a looming US stock market flotation.

The collapse into administration of 3D printing firm Metalysis meanwhile wiped out a stake that was valued at £1.6 million last year, though stakes in Oxford Pharmascience, Origin, CeQur and Mafic were written up.

The downgrades have contributed to Woodford Equity Income's heavy losses since the fund's suspension three months ago, with the fund down 14.9% over that period.

Woodford Patient Capital's net asset value (NAV) has fallen by 15.4% over the same period, though that is dwarfed by the 46% slump in the shares amid fears over the impact of Woodford's sale of unquoted companies from his flagship fund.

The Patient Capital board announced a 4.3% fall in the NAV last month due to the Industrial Heat writedown.

That followed two major markdowns in June, by 3.2% and 4% respectively, as the trust wrote down first its investment in Immunocore, then its holdings in 'certain smaller less mature unquoted assets in the company's portfolio'.

MaxiRobriguez

Don't worry, Woodford's bought BAT, BT and IAG for the income equity fund. What could possibly go wrong with that trio of stocks?

iglad

Apparently it's all the better performing stocks outside the UK's fault. The audacity of the man!

https://www.moneyobserver.com/news/neil-woodford-blame-markets-poor-performance

Prism

iglad wrote: »

Apparently it's all the better performing stocks outside the UK's fault. The audacity of the man!

https://www.moneyobserver.com/news/neil-woodford-blame-markets-poor-performance

That type of attitude is part and parcel of being a value focused investor. You have to believe that you are right and everyone else is wrong (or doesn't know any better). I'm not convinced that approach well ever work again except for investing in small, unresearched companies - which admittedly is what he was trying to do, but in the wrong type of fund - oh and he doesn't seem especially good at it either.

MaxiRobriguez

iglad wrote: »

Apparently it's all the better performing stocks outside the UK's fault. The audacity of the man!

https://www.moneyobserver.com/news/neil-woodford-blame-markets-poor-performance

To be fair, there is some truth in this. Growth over value is evidenced in returns and the UK market has been shunned because "Brexit" with little regard to the underlying validity of the businesses comprised of the FTSE index.

There are opportunities, but I don't think Woodford can blame his funds poor performance for this when the reality is the allocation he has chosen is frankly rubbish, and punting for BT, BAT and IAG today feels like another tick in the box of hasty, ill-considered purchases with little due diligence.

AnotherJoe

The man has clearly lost the plot. Either he believes this tosh "a big boy did it and ran away" , which bodes badly for his ongoing investments, or he's a bare faced liar, which also bodes badly for his ongoing investments.
This is not going to end well.