Former
star
manager
Neil
Woodford
has
been
slapped
with
a
warning
notice
over
his
handling
of
the
management
and
liquidation
of
the
Woodford
Equity
Income
Fund
(WEIF)
by
the
Financial
Conduct
Authority
–
nearly
five
years
after
the
strategy
infamously
and
dramatically
unraveled.
In
a
statement
this
morning,
the
FCA
said
Link
Fund
Solutions,
which
had
been
responsible
for
administering
the
fund,
had
failed
to
act
with
due
care,
skill,
and
diligence,
in
its
management
of
WEIF.
But
it
also
accused
Woodford
himself
of
a
“defective”
approach
to
running
his
own
strategy.
“[Mr
Woodford]
held
a
defective
and
unreasonably
narrow
understanding
of
his
responsibilities
for
managing
the
WEIF’s
liquidity
risks,”
the
FCA
said,
and
failed
“to
pay
due
regard
to
the
need
to
ensure
a
reasonable
and
appropriate
liquidity
profile
for
the
WEIF
when
making
investment
decisions
in
the
face
of
ongoing
redemptions
and
net
outflows
from
the
WEIF”.
Though
the
statement
came
in
the
form
of
a
“warning
notice”,
that
is
by
no
means
the
end
of
the
matter.
Such
edicts
merely
serve
to
confirm
that
the
regulator
is
on
the
brink
of
taking
some
form
of
action
against
an
individual
or
business.
Woodford
may
now
make
representations
to
the
FCA’s
regulatory
decisions
committee
before
a
final
decision
on
action.
Even
after
that,
he
can
appeal
at
an
upper
tribunal
hearing.
Last
month,
retail
investors
in
WEIF
were
issued
the
first
redress
payments,
totalling
185.7
million,
by
Link
Fund
Solutions.
A
raft
of
litigation
cases
from
private
investors
is
also
still
outstanding.
Woodford
Investment
Management
was
officially
closed
in
2019
after
a
wave
of
redemptions
from
its
two
flagship
strategies
prompted
a
liquidity
crisis.
At
the
time,
the
regulator
itself
was
criticised
for
only
having
found
out
about
the
severity
of
the
situation
after
reading
a
news
story
online.
Having
risen
to
fame
as
a
fund
manager
at
Invesco,
Neil
Woodford
launched
his
eponymous
business
in
2014,
with
the
promise
of
finding
highly-successful
contrarian
investments.
When
things
eventually
ground
to
a
halt
five
years
later,
it
was
the
most
significant
example
in
modern
UK
financial
services
history
of
a
former
“star”
fund
manager
finding
themselves
humbled
on
the
rocks
of
mass
redemptions,
regulatory
pressure,
and
allegations
of
mismanagement.
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