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Hubristic Woodford was the orchestrator of his own downfall

Fund manager still refuses to accept any responsibility for collapse of his flagship fund

Neil Woodford: now blaming the Brexit he initially dismissed as a concern for the failure of his flagship fund in 2019. Photograph: Woodford Investment Management/PA Wire
Neil Woodford: now blaming the Brexit he initially dismissed as a concern for the failure of his flagship fund in 2019. Photograph: Woodford Investment Management/PA Wire
Proinsias O'Mahony's picture
Proinsias O'Mahony
Sat Jun 01 2024 - 07:13

Fallen fund manager Neil Woodford should be stripped of his CBE, according to UK financial campaign group Transparency Task Force, which complains that he “seems to have accepted no formal responsibility, showed very little genuine remorse or made any meaningful effort to remedy the situation” following the 2019 collapse of his flagship fund.

Whatever about returning his CBE, one can understand the frustration with Woodford.

In April, the UK’s Financial Conduct Authority issued a warning against him, saying he had a “defective and unreasonably narrow” understanding of his responsibilities. Just days later, Woodford launched his new blog, insisting he was not a “villain” and that some things were “beyond our control”, such as the different “economic and political landscape... in the wake of the Brexit vote”.

Really? In 2016, Woodford commissioned a report from Capital Economics, which was founded by Daily Telegraph columnist and Brexiteer Roger Bootle. Unsurprisingly, its conclusions were benign, and Woodford confidently dismissed Brexit-related fears. In 2017, he commissioned a similarly reassuring follow-up report, and later complained of anti-Brexit “drivel” emanating from the “London elite” and the “vested interests”.

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Woodford seemingly thought he was right about Brexit and almost every mainstream economist was wrong. He paid the price for this hubristic attitude.

Similarly, no one forced Woodford, who had built his reputation as an old-fashioned value investor, to stray outside his circle of competence and start investing in speculative biotechs and unlisted startups. No one forced him to load up on illiquid Alternative Investment Market companies.

Woodford needs to take more responsibility. Like Liz Truss, he seems to think he was the victim of external events, as opposed to the orchestrator of his own downfall.

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