Business World

Wednesday 26 June 2019

London regulator calls on money manager Woodford to rethink fees

Neil Woodford, founder and fund manager at Woodford Investment Management
Neil Woodford, founder and fund manager at Woodford Investment Management

Silla Brush and Suzy Waite

The City of London's top regulator added his voice to calls for Neil Woodford to rethink charging management fees while investors are barred from withdrawing money from his flagship fund.

Mr Woodford "should consider his position" on fees during the halt in redemptions from the LF Woodford Equity Income Fund, Andrew Bailey, CEO of the Financial Conduct Authority, told the BBC 'Today' programme.

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Mr Bailey's remarks follow similar requests by Nicky Morgan, chairwoman of the UK Parliament's Treasury Committee, and Hargreaves Lansdown, the investment platform that was a major supporter of the former star fund manager.

"The company will continue to charge the fee as the fund remains actively managed and we focus on repositioning the portfolio," a Woodford spokesman said in response to Bailey's comments.

The Woodford Equity Income Fund generates about £65,000 (€73,000) a day in fees, which are paid directly to the Woodford Investment Management to provide infrastructure, resources and an operational platform, according to a person familiar with the matter, who asked not to be identified.

Since Mr Woodford shocked the UK capital by freezing his fund last week, some of his biggest backers have distanced themselves from him.

The FCA announced that it's reviewing the fund's strategies, particularly related to investments in unquoted securities listed this year on a stock exchange in Guernsey.

Mr Bailey said there was no time limit for the suspension, which he called a "sensible safety valve" to prevent a fire sale that would have hurt investors. Bailey has been called by the UK Parliament's Treasury Committee to explain oversight of Mr Woodford's funds.

Bloomberg

Irish Independent

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