Woodford Investment Management

Woodford Investment Management was an asset management firm established in 2014 by Neil Woodford, one of the UK's most recognized fund managers, alongside Craig Newman. Woodford built a formidable reputation during his 26-year tenure at Invesco Perpetual, where he managed significant income funds and was known for his distinct, often contrarian, investment style focused on long-term growth and dividend-paying stocks. His background as a successful manager of large-cap UK equities attracted a substantial following, enabling the new venture to accumulate billions in assets under management shortly after its launch.

The firm's primary business was managing investment funds for retail and institutional clients, operating within the UK's asset management market. Its business model centered on generating revenue through management fees charged as a percentage of the total assets held in its funds. The flagship product was the LF Woodford Equity Income Fund (WEIF), which aimed to provide investors with a combination of capital growth and a reasonable level of income. The fund was characterized by its significant holdings in UK-listed companies, but also controversially held a substantial and growing allocation to unlisted, early-stage companies in sectors like biotech and technology, a departure from traditional equity income strategies.

The firm's trajectory shifted dramatically in June 2019 when the flagship WEIF was suspended, trapping billions of pounds of investor assets. This action followed a period of sustained underperformance and large-scale withdrawal requests from investors, which created a liquidity crisis due to the fund's heavy exposure to illiquid, unlisted stocks that could not be sold easily to meet redemptions. The suspension marked the beginning of the end for the company. By October 2019, the decision was made to liquidate the Equity Income Fund, and Neil Woodford resigned from his role and announced the closure of the entire investment firm. The collapse became one of the most significant scandals in the UK's modern investment history, leading to major losses for hundreds of thousands of investors and prompting regulatory reviews by the Financial Conduct Authority (FCA).

Keywords: asset management, equity income fund, investment firm, fund management, retail investors, UK equities, liquidity crisis, fund suspension, investment scandal, unlisted assets