Investor exodus and Kent County Council force Woodford to block redemptions

Investor exodus including Kent County Council, a longstanding backer asking return of £250m has forced Neil Woodford blocking redemption from his £3.7bn equity income fund  after a catalogue of under performance, inflicting serious blow to the reputation of the UK’s highest profile fund manager.

The freeze on redemption came exactly five years  after Mr Woodford opened his eponymous fund management group, following a steady stream of investor outflows for the last two years, with the fund shrinking by two-thirds to £3.7bn since a peak of £10.2bn in May 2017.

Woodford was a star fund manager at Invesco Perpetual, also had another setback yesterday, as shares in construction group Kier, one of the fund’s main holdings  fell 40 per cent  after a profit warning.

In the short term the freeze prevents the withdrawal of capital but also stops new investors from putting money into the fund. Link, Mr Woodford’s authorised fund manager must review the fund’s suspension every 28 days and inform Financial Conduct Authority of its results.

Woodford Investment Management said it had “ come to the conclusion it is in the best interests of all investors to suspend the issue, cancellation, sale, redemption and transfer of shares in the fund. To protect investors in the fund” by giving Mr Woodford time to sell unlisted a illiquid stocks and buy more liquid investments that  could be sold to meet the redemptions. In the last four weeks alone Mr Woodford’s flagship equity income fund shrank by £560m.

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