Neil Woodford excuses investors for suspending the fund | Business

Neil Woodford is apologetic to investors during his first public sightings since he had suspended trading on his biggest fund on Monday.

Woodford, once the UK's most renowned fund manager, said he was "extremely sorry" for making the decision to prevent investors from withdrawing cash from its flagship investment fund, Equity Income. Fund – but insisted that it was in their best interest.

In a video posted on YouTube, he said: "As difficult as this decision is, and obviously frustrating for you, our investors, we felt that it was necessary to protect your interests.

"I am extremely sorry that we had to make that decision. We understand the frustration of our investors. All I can say in response to that is that this decision was motivated by your interests. "

Woodford said it would inform investors and that the fund would be reopened if it was "appropriate", without however specifying when.

The fund will be suspended for at least four weeks, during which time investors will not be able to withdraw or invest money. The decision to freeze the fund was made after a series of customer withdrawals consecutive to a series of bad bets on the market.

The Kent County Council's pension fund's request to withdraw its $ 263 million investment would have prompted Woodford to make the decision to suspend the fund.

Addressing investors, Woodford said in the video that the temporary interruption of withdrawals would give the fund the "time and space" needed to reduce exposure to illiquid stocks and cash. private companies.

He said the capital would be redeployed into "more liquid shares of the FTSE 350, but mainly the FTSE 100, which fit my main strategy but are more liquid and more conventional, if you will."

The badets of the Woodford Equity Income Fund declined by £ 560 million in May to £ 4.3 billion, according to data compiled by Morningstar, the financial research firm.

Woodford built his reputation in 26 years at Invesco Perpetual, where he personally managed 25 billion pounds sterling for pension funds and other investors. He left Invesco in 2013 to settle on his own.

Woodford paid out to himself and his partner Craig Newman nearly £ 37 million during the 2017-2018 fiscal year.

The decision to suspend its flagship fund had an impact on Tuesday, when investors became frightened and the shares of its Patient Capital Trust Fund, listed on the FTSE 250, fell by 20% at some point. Share prices for several other companies in which it is a key investor or which sells its funds have also fallen.