Woodford Concerns

cogito

I suspect that Woodford was never as good as most of us thought he was. He made a lot of money for me in the years he was with Invesco and for the first couple of years after setting up on his own. In his time with Invesco he will have been constrained by what his employers allowed him to do and, to be fair, did the job well. I suspect though that he was chomping at the bit to put his own ideas into practice and that is partly the reason why he left Invesco.

Now that nobody was holding him back (not even Link whose job was to provide oversight), he was able to put his ideas into practice and the results are there for all to see.

The failure of the various parties involved, including HL and the FCA, is a scandal.

talexuser

fun4everyone wrote: »

learning lessons.

I like the way they are "talking" to the regulators etc to find a resolution, and not presumably being asked some very embarrassing questions about their role in the whole caboodle. Also if they were asking Woodford about his unquoted % already in 2017, why on earth was it still a buy and not a hold until a more stable mix was achieved?....stinks.

bowlhead99

fun4everyone wrote: »

New statement from Hargreaves Lansdown.

https://www.hl.co.uk/news/articles/woodford-equity-income-what-to-expect-now

One of their quotes from that is:
"The most important thing is that the Woodford Equity Income Fund reopens as soon as possible, while protecting the interests of investors and those who wish to sell their holdings"

Opening to redemptions as soon as possible is fundamentally incompatible with protecting the interests of those investors who are not yet ready to redeem.

It's like saying that the absolutely most important thing to do is leave the EU in the next couple of months while having a minimal level of disruption. Such platitudes are playing to the crowd by saying you can have your cake and eat it, and we are right behind you all the way, while the choice in practice is between one or the other.

Thrugelmir

cogito wrote: »

I suspect that Woodford was never as good as most of us thought he was. He made a lot of money for me in the years he was with Invesco and for the first couple of years after setting up on his own. In his time with Invesco he will have been constrained by what his employers allowed him to do and, to be fair, did the job well. I suspect though that he was chomping at the bit to put his own ideas into practice and that is partly the reason why he left Invesco.

There would have been other people involved behind the scenes, i.e. backers in creating the new entity.

Likewise the role of Link Fund Solutions in the valuations of the unquoted elements of the portfolio.

Malthusian

StellaN wrote: »

Agreed, but I just think it is amazing that for 25+ years clients and institutions and other wealth managers such as SJP etc were delighted with NW and forever singing his praises.

Because he was delivering sustained outperformance. There are hundreds of investment managers in the country and it is a mathematical inevitability that some of them will deliver sustained outperformance, and a few of them can do it for 25+ years. That would be Woodford.

He's then subject to personal insults and called a fool, bad fund manager and completely incompetent by forum members who obviously know a lot better than him.

Everyone who has not invested their own or other people's money directly into Industrial Heat raise your hands.

Congratulations, you all know more than Neil Woodford.

If Woodford's outperformance in the 90s and 00s was due to inherent ability, rather than luck and the mathematical fact that among hundreds of fund managers a handful will inevitably outperform over a period of decades, then he should have been able to continue that outperformance until he retired to his yacht.

Plenty of long-forgotten managers avoided investing in Facebook, Google and Amazon thinking they were the next Neil Woodford and would be proven right when the dot-com 2.0 bubble burst, and all that happened was their funds underperformed and they got quietly sacked.

dividendhero

fun4everyone wrote: »

New statement from Hargreaves Lansdown.

https://www.hl.co.uk/news/articles/woodford-equity-income-what-to-expect-now

HL sayeth..

We are talking with Woodford Investment Management, Link Asset Services (the fund’s Authorised Corporate Director) and the regulator, and are committed to keeping you up to date with the latest developments.

Why are HL speaking with Link Asset Services? They've no contractual relationship with them :mad:

If HL are serious about drawing lancing the Woodford boil they should take over the Woodford Equity Income fund

cogito

From Investment Trust Insider:

Secret reports dating as far back as eight years ago raised the alarm over embattled fund manager Neil Woodford’s record of investing in unquoted and smaller companies, but financial advice giant St James’s Place (SJP) is keeping them under lock and key.
St James’s Place earlier this month dropped Woodford as manager of £3.5 billion of its funds following the suspension of his flagship Woodford Equity Income fund, ending a relationship that has lasted nearly two decades.
But its doubts over some aspects of Woodford’s investment approach date back to 2011, when the national financial advice group commissioned investment consultants Stamford Associates to pen a weighty report into the fund manager.
That report, to assess the ‘key man risk’ to St James’s Place posed by the billions Woodford ran for its clients, found no evidence of the fund manager adding value through his investments in early-stage companies.
Those findings were echoed by a second report from Stamford, in 2013, as St James’s Place weighed up whether to keep faith with the manager when he quit Invesco Perpetual to set up his own fund group.
A senior executive who has seen the reports said the findings were striking. ‘It wasn’t obvious where the skill was when you went down the size scale,’ he said, adding they called into question Woodford’s investment with small and unquoted companies ‘to the point where you asked, “Why do you do this stuff?”.’
Another person who has seen the reports said their verdict was clear that the manager’s skill lay in bets on big FTSE 100 and FTSE 250 companies. ‘The conclusion was that he didn’t add value in small cap and unquoted investing,’ he said.
St James’s Place ultimately stuck with the manager, transferring £3.5 billion of its funds from Woodford’s old employer Invesco Perpetual to the fund manager’s new venture, Woodford Investment Management, but adding one crucial caveat.

In a move that angered Woodford, according to sources, the financial advice giant required the manager to sell the unquoted and smaller company portion of the St James’s Place portfolios as it limited his UK investments to FTSE 100 and FTSE 250 stocks.

bowlhead99

dividendhero wrote: »

Why are HL speaking with Link Asset Services? They've no contractual relationship with them :mad:

Why the mad face? Link are the ACD on the fund which HL distribute to their customers (and into which HL's managed funds also invest), and Link as ACD take responsibility for producing the daily valuations and determining that no subscriptions or redemptions can currently be made by HL anyone else who acts as a distribution intermediary for this Link-directed fund.

It would be somewhat unusual if HL did not get a dialogue going with Link, especially as WEIF will not be the only Link-run product that HL distribute to customers.

Malthusian

A senior executive who has seen the reports said the findings were striking. ‘It wasn’t obvious where the skill was when you went down the size scale,’ he said, adding they called into question Woodford’s investment with small and unquoted companies ‘to the point where you asked, “Why do you do this stuff?”.’
Another person who has seen the reports said their verdict was clear that the manager’s skill lay in bets on big FTSE 100 and FTSE 250 companies. ‘The conclusion was that he didn’t add value in small cap and unquoted investing,’ he said.

It sounds as if billions of pounds of UK wealth would have been saved if the BBC had put Neil Woodford on Dragons' Den. Thus saving him the need to play at Dragons' Den with everyone else's money.

A Woodford spokesman said the fund manager had always adopted an agnostic approach to the size of the companies he invested in.

Fun fact: "agnostic" is essentially Ancient Greek for "know-nothing".

Of course in English agnosticism is supposed to be the principle of "to follow your reason as far as it will take you" (in the words of its coiner, Thomas Huxley) but I know which one seems more appropriate.

arnoldy

Just looked at their (HL) statement. A masterpiece of PR that sticks to the script. Avoids questions like: were they selling at the same time as pushing it on their trusting customers? What were senior HL employees buying and selling? Why are there so many funds that erhm don't appear to really deliver on the Poverty 50 list? Why did they push the fund after the 2017 Concerns?
Why are they not refunding fees from 2017? What lessons are they going to learn and how are they going to clean up their Corporate culture?

I think they really don't get it and how much they have lost the trust of public.