Sunday 18 August 2019

UK's Woodford faces calls to waive fees on frozen fund

Redemptions: Gate closed on Mr Woodford's flagship fund
Redemptions: Gate closed on Mr Woodford's flagship fund

Silla Brush

HIGH-profile UK fund manager Neil Woodford is coming under mounting pressure to waive management fees on his beleaguered fund.

Conservative MP Nicky Morgan, chair of the UK Parliament's Treasury Committee, said investors shouldn't be forced to pay Woodford while they are barred from withdrawing their money from his flagship £4.3bn equity fund.

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The fund's only confirmed Irish constituent is life sciences investment firm Malin. Woodford Investment Management owns almost 23pc of Malin, but the stake accounts for just 0.97pc of the fund's total value.

Ms Morgan said the suspension in redemptions has given the former star fund manager "breathing room" to resolve problems.

"He should afford his investors the same space and waive the fund's fees while the fund is suspended," she said.

The intervention by Ms Morgan adds to Mr Woodford's woes after several major backers distanced themselves from the 59-year-old money manager.

Hargreaves Lansdown, one of his main supporters, also called on him to halt management fees while investors aren't able to trade in the fund. The UK's Financial Conduct Authority said yesterday it was keeping a close watch on the fund.

A spokesman for Mr Woodford declined to comment on Ms Morgan's statement.

"The FCA has rightly said that it is closely watching the fund," said Ms Morgan.

"The Treasury Committee will no doubt raise this troubling episode, and what lessons can be learnt, when we take evidence from the FCA and Bank of England." Earlier this week, Mr Woodford published a video apology to investors for abruptly suspending redemptions of the equity fund, a move that has reverberated across UK markets.

"We understand our investors' frustration. All I can say in response to that, of course, is that this decision was motivated by your interests, our investors," he said in the video.

The decision to freeze redemptions is a shocking reversal for the money manager, who had built up a reputation over many decades as a stellar stock picker.

Bloomberg

Irish Independent

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