Woodford Concerns

Johnnyboy11

From yesterday's Telegraph:
"Savers trapped in disgraced money manager Neil Woodford’s Equity Income Fund should brace for a huge hit to their nest eggs when the tainted fund is wound up.

The warning comes in a leaked report commissioned by Link Fund Solutions and conducted by private equity firm PJT Park Hill.

It shows that investors are likely to lose at least 32.5pc of their money when the fund is liquidated, wiping £1bn off the fund, with a worst-case scenario suggesting that values could fall by as much as 42.6pc. ..."

Alistair31

Is he still collecting fees ?

Moe_The_Bartender

talexuser wrote: »

Barnett defends his 4th quartile performance over 1, 3 and 5 years here

https://www.trustnet.com/news/7460567/invescos-barnett-come-to-me-if-you-want-reliable-income?utm_source=Trustnet%20Newsletters&utm_campaign=c23222f35d-EMAIL_CAMPAIGN_2019_11_11_01_18_COPY_01&utm_medium=email&utm_term=0_2314bd04ee-c23222f35d-76889477

basically comes down to "I don't have the same stocks as Woodford" so that's dandy then.

I'm amazed that he still has a job considering his recent performance. The amount of money investors have pulled out of his funds is staggering and yet Invesco still seem to back him.

AnotherJoe

Moe_The_Bartender wrote: »

I'm amazed that he still has a job considering his recent performance. The amount of money investors have pulled out of his funds is staggering and yet Invesco still seem to back him.

Reading that if you replaced his name with Woodford you couldn't tell the difference in attitude.

bowlhead99

Johnnyboy11 wrote: »

From yesterday's Telegraph:

The Times have a similar story. This is from the analysis that was done before they officially decided to sack Woodford and wind up the fund.

Woodford's own analysis showed that if you tried to wind it up over 12 months, investors would lose 35.7% - such are the difficulties of being a distressed seller of thinly traded holdings - which is why his press release on being sacked and told it would wind up ASAP was to the effect that he didn't accept or believe it was in investor's best interests to do that. PJT Park Hill's base case was 32.5%, which sounds better than Woodford's figure and gives the fund a clean break from Woodford... so they were given the gig.

Alistair31 wrote: »

Is he still collecting fees ?

Not on the Equity Income Fund because he was kicked off it a month ago. The management fees are being collected by Link as usual, largely being paid over to Blackrock and Park Hill with any surplus returned to the fund. Once they officially enter liquidation in a couple of months, the management fee percentage will stop being taken but Blackrock and PJT PH will still be paid directly by the fund for their work

For the Income Focus fund, he is still managing it after giving notice to quit, so he is still charging fees. Link are still considering during his notice period whether to get a new manager in, perhaps merge it into another fund, or liquidate it.

[Deleted User]

Moe_The_Bartender wrote: »

I'm amazed that he still has a job considering his recent performance. The amount of money investors have pulled out of his funds is staggering and yet Invesco still seem to back him.

But who would want to take it over?
A new manager would be constrained, as was Barnett when he took over from Woodford.
It's not like football where a new broom can come come in, buy half a squad while discounting the duds chosen by the previous manager. Changing the make-up of the fund is going to take a long time.

AnotherJoe

WPCT now under 30. Surely going to be closed. Just too embarrassing to keep it going, at the moment Shroders have plausible deniability
p.s. In 6 months there will be an interview with NW where he says if only investors had faith he would not have lost them so much money as the new management.

Reaper

A recent analyst note put the NAV at 29p, and I think it should probably be lower as the note was "on the basis that certain valuations, like cold fusion company Industrial Heat, could not be written down much further." I think most here would agree it can and should!
https://portfolio-adviser.com/projected-woodford-fund-losses-spell-trouble-for-wpct/

Also in that link Woodford Equity Income investors are expected to lose 32-42% according to a Link commissioned report (and I don't particularly trust Link). The worst losses are expect to be in the same shares held by WPCT.

I'd love to buy an under priced and unloved stock but I'm not sure the falls have ended yet. When Schroders take over at the end of the year I would expect them to:
1) Say things are dire to get all the bad news out, push the price down to a low starting point so their subsequent performance looks good.
2) Say whether they plan to keep going or wind it up.

I think that is the point I will decide whether to invest.

Brian65

Reaper wrote: »

When Schroders take over at the end of the year I would expect them to:
1) Say things are dire to get all the bad news out, push the price down to a low starting point so their subsequent performance looks good.

agreed
and they will charge higher fees
So I was dumbfounded by the sudden hike in the share price when the widely anticipated news of a manager change was announced.

Thrugelmir

talexuser wrote: »

Barnett defends his 4th quartile performance over 1, 3 and 5 years here

basically comes down to "I don't have the same stocks as Woodford" so that's dandy then.

Yet everybody says investing is for the longer term, i.e. over 10 years. While scrunitising short term performance tables. You cannot have it both ways.