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Just 20% of wealth managers back Woodford venture
by David Campbell on Oct 21, 2013 at 08:14
Half of Wealth Manager’s readers fear that a rebalancing of Neil Woodford’s funds – whether voluntarily to new stock selection or involuntarily due to liquidations – could cause a run on shares.
More than half said that fears of a run on the more than £32 billion in assets that Citywire A-rated Woodford manages at Invesco Perpetual would persuade them to sell the funds.
The issue is likely to be a problem ‘mainly in the less liquid holdings’ said Richard Whitehead of Dart Capital in response to the reader survey.
Others pointed out that making a decisive call at this stage seemed premature. ‘Seriously! This whole thing is ridiculous. If we are following managers to this extent we should not be trusted investing client moneys,’ wrote another who remained anonymous.
More than two fifths (43.5%) said that they were planning to stick with Citywire AA-rated Mark Barnett however, the manager appointed to his funds following news that Woodford would leave the company next year to launch his own investment house.
More than a third (33.7%) said that they were seeking another peer manager. Just 19.6% of managers said that they planned to invest in his new business while 10.9% said they would allocate to a different sector.
The reluctance to invest in the business is more likely due to the fact that Woodford has little experience as an entrepreneur than any scepticism about his asset management skills, and will hardly be seen as disastrous if his army of retail investors follows him.
Citywire AA-rated John Mclure’s Unicorn Income looks set to be a big beneficiary of the change according to responses on where money would go, as did AA-rated Adrian Frost and AA-rated Adrian Gosden’s Artemis Income fund .
On average, managers anticipated that the company would continue to hold 59% of assets currently invested in his funds, although that covered a spectrum from 20% up to more than 90%, suggesting that even well-informed guesses remain just that
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