Wealth manager ends association with Neil Woodford’s firm

Under-pressure city heavyweight Neil Woodford was dealt another major blow after St James’s Place ended its £3.5 billion association with his firm.

The leading wealth management company removed Mr Woodford’s mandate from a series of funds, which reportedly represented 40% of the £8.6 billion under his oversight, on Wednesday.

One of Britain’s leading stock pickers, Mr Woodward has endured a nightmare week after it was announced trading on his multi-billion pound flagship fund had been suspended amid a surge in redemptions.

The investor said he was “extremely sorry” in a video message and insisted Woodford Investment Management had a plan in place to stabilise the fund.

But on Wednesday St James’s Place, one of the country’s biggest wealth management firms, said it was reallocating the mandate on funds under his management, the Financial Times reported.

Mr Woodford was responsible for the firm’s UK High Income Unit Trust, UK Equity, Income Distribution and SJPI UK High Income funds, the paper said.

The move came after the City watchdog stepped up its inquiries into events at Woodford Investment Management.

Meanwhile retail investors Hargreaves Lansdown jettisoned Woodford from its Wealth 50 list of recommended funds.

Mr Woodford has sought to reassure holders that they will eventually be able to access their investments.

It has been claimed major investors in the fund were given no prior warning that they would be banned from withdrawing their cash.

Kent County Council, which attempted to withdraw £263 million invested in the Equity Income Fund, said it asked the company for its cash on Monday, but within hours bosses suspended all withdrawals.

In the three-minute clip Mr Woodford said he was “extremely sorry that we’ve had to take this decision”, adding: “When it is appropriate we will open the fund so that you can buy and sell as normal.”

“As difficult a decision as this is, and clearly frustrating for you, our investors, we felt that this was necessary to protect your interests,” he said.

The frozen Woodford Equity Income Fund is the company’s largest, with a reported value of £3.7 billion, but this is down heavily on the £6.8 billion recorded a year ago.

According to the Financial Times, the fund, launched four years ago, was valued at £10.2 billion in May 2017.

On Wednesday it emerged the Financial Conduct Authority was demanding answers from Mr Woodford and his brokers over their decision to invest so heavily in unlisted companies based offshore in Guernsey.

There was no suggestion of wrongdoing at Woodford Investment Management, the watchdog said, but officials want to understand the chain of events leading to the suspension.