ONE of the UK’s most respected fund managers, Neil Woodford has weathered more than one period of underperformance in his long career, and is currently experiencing another.
Woodford became the darling of the fund management sector during his tenure at Invesco Asset Management, taking lots of loyal investors with him when he left and launched his own self-named range of products in 2014.
But his reputation for stock-picking has taken a battering in recent months, with several holdings such as Provident Financial and Purplebricks posting poor returns, causing its flagship Equity Income fund to underperform its sector benchmark.
He had backed a handful of fintech and peer-to-peer lending businesses across his three portfolios at Woodford Investment Management, but has recently been divesting holdings to meet rising redemptions as investors start to lose patience.
Read more: Neil Woodford: It’s not us, it’s you
The timeline below shows how he has bought and sold stakes in P2P lenders over the last few years.
At the time of writing, the manager retains stakes in the listed Honeycomb investment trust and unquoted RateSetter, but could these be the next holdings to go to the chopping block as the fund manager scrambles to meet withdrawals?
Neil Woodford’s P2P investing timeline
January 2015 – Woodford first buys stake in P2P Global Investments trust during a C-share issue in which it raises £250m.
May 2017 – RateSetter announces it has raised an additional £13m from City investors including Woodford IM, which already had a stake in the business.
August 2017 – Woodford increases stake in Honeycomb trust from 16 per cent to 17 per cent of its share capital.
November 2017 – Woodford tops up position in Honeycomb trust to 18 per cent of its share capital.
December 2017 – Woodford ups stake in P2P Global Investments by £8m to £102m.
March 2018 – Woodford transfers five unquoted holdings including RateSetter from his Equity Income fund to Patient Capital trust.
April 2019 – Woodford sells stake in P2P Global Investments to wealth manager Quilter for £86m.
May 2019 – Woodford sells entire holding in VPC Specialty Lending – he had owned 16 per cent of the company, a stake worth £49m.
Woodford is no stranger to controversy and pessimism among investors.
Eyebrows were raised when he snubbed banking stocks ahead of the 2008 financial crash, a policy which later reaped rewards for loyal investors.
Investing is a long term game and only time, and investor patience, will tell whether these latest decisions eventually prove Woodford right again.