CORPORATE REPUTATION
THE DOWNFALL OF NEIL WOODFORD
ROSIE MURRAY-WEST
LOOKS AT THE ROLE POOR COMMUNICATIONS PLAYED IN THE COLLAPSE OF ONE OF BRITAIN’S BEST KNOWN FUNDS
My name is Ozymandias, King of Kings; Look on my Works, ye Mighty, and despair ONLOOKERS surveying the wreckage of Neil Woodford’s investment empire might be forgiven for drawing the obvious parallel between Shelley’s fictional tyrant and the fate of the financial service’s best-known name. Woodford bestrode the industry like a Colossus, first
at Invesco where he managed £30 billion of assets and rode out the financial crisis, and then as master of his own destiny at Woodford Investment Management, where his popularity ensured he garnered £14 billion in funds in a fortnight. As a fund manager, Woodford was in charge of buying shares in companies he thought would do well, bundling them together into portfolios of stocks for individuals to buy into in the hope that his picks would increase in value. ‘He was the only fund manager anyone has heard of,’ says Darius McDermott, managing director of Chelsea Financial Services. ‘He was a household name’. Notoriety might be a blessing for a fund manager
when they are riding high, but unless you’re more likely to study Shelley than the daily news, you will already be aware of what happened next.
CorpComms | February/March 2020 Woodford’s main fund suffered blow after blow
in terms of the performance of its underlying investments, and as investors began to pull their money out in a panic it became clear there was an even worse problem at the fund’s heart. Woodford had changed the mix of his investment from a bulk of liquid assets – easy to sell when investors wanted their money back – to a larger percentage of early-stage illiquid stocks. The main fund was frozen and later closed, leaving investors unable to access their money and nursing huge losses.
WOODFORD IN THE STOCKS Woodford’s disgrace has resulted in a very public drubbing. Once the darling of the investment world, he has felt the tongue-lashing of the newspapers who used to fete him. Headlines included The Sun’s Fall of a Genius while the Mail on Sunday revelled in a quote from former associate Peter Hargreaves, retired founder of investment platform Hargreaves Lansdown, who said Woodford ‘knew he was toast’. Journalists did not confine themselves to criticising
Woodford’s professional life either. The Mail on Sunday also carried an interview with the fund manager’s first wife, Jo Woodford, describing how he dumped her while she was walking the couple’s dogs in order to get
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