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The Woodford Woodstock: rock ‘n’ roll funds

The Woodford Woodstock: rock ‘n’ roll funds

There’s a real buzz in the funds industry at the moment. 

Wealth Manager has never dedicated quite so many resources and column inches to a new firm or fund in such a short period as it has done to Neil Woodford’s new venture. Not even close.

Some cynics may suggest he’s simply using us as a marketing tool, but does he really need to use us for that?  

Besides superb performance, which stands the test of time, the last few weeks prove Neil Woodford is actually a living, breathing human, not some Frankenstein-like creation.

The joke at Citywire was you’d get more chance of getting an interview with the Queen than Neil when at Invesco Perpetual.  

We had to scrape info from factsheets or his Edinburgh Trust’s stock exchange updates to get him into our headlines. It was all a little desperate and his very existence sometimes felt like an urban legend.  

Now we’re spoilt. From being invisible Woodford is now omnipresent. He even has a blog on his website.   

He may have had few months to practise his turn, but Woodford is not the trembling bag of nerves that we imagined had been locked up all these years. His ease was clearly demonstrated in our exclusive video - ‘I want to build a 21st century firm’.

And it’s not just the press getting all worked up. ‘Neil Woodford added to FundsNetwork Investment Forum’, one press release celebrated, while WhiteChurch and Hargreaves Lansdown raced to send out notes on their first meetings with Woodford.  

Last night it was the turn of Chelsea Financial Services to have their Woodford moment, over an intimate dinner hosted by Darius McDermott. Dinner with Woodford? Really?!

Of course McDermott was delighted to be midwife at this rebirth, taking the stage to reveal how he first invested in Woodford in 1996 after a tip off from a somewhat questionable source. It paid off in the end.  

Then it was time for the main event. Did we learn anything new?

What is clear is Woodford loves his job and talking finance. So much so he was prepared to leave a fruit salad to fester for a good hour while fielding a diverse range of questions...and there were lots of questions.   

We also learned he bought a bank for the first time in 10 years back in the middle of last year and that his new firm is unlikely to follow the Invesco Perpetual model.

Here's a selection of pearls from Woodford last night:

Why he left Invesco Perpetual

‘It was not something I planned to do but when the opportunity arose it was a no-brainer.’

Innovation

'It’s lamentable that as an economy we fail to turn great science into great business. We need to rely on this intellectual economy for growth. The capital provision environment these entrepreneurs work in makes them risk averse and it means it takes them years to get anywhere.'

Unquoted stocks

'There’s a misguided perception of risk. Investing in these stocks is a much more labour intensive process – the relationship you build is much deeper, you become an embedded partner with that business.'

Valuation

'Is an art not a science. When you are valuing a company you step into the future and yes it can sometimes be an imperfect judgment. When I think about Astrazeneca I’m stepping into the future.'

Return expectation

‘High single digit returns over the medium to long term.’

QE

'It has outgrown its usefulness and policy makers are now worried about unintended consequences. The withdrawal of QE will see gap between share prices and fundamentals narrow.'

Recruitment

'I have never believed a fund manager should be simply recruited from the Oxbridge graduate programme. My view is flexible – I look for people who have an innate analytical talent.'

Tech stocks

'Throughout my career I have always struggled to understand valuations. Yes Astra oozes technology but it doesn’t have someone wearing jeans and t-shirt representing it.'

Giving up

'I would pack it in if I made a Horlicks of it and I am not planning to do that. I have a lot of drive and ambition.'

Communication

'How we communicate with the media and investors is really important. We won’t be doing what we did, we will be more open and accessible.

'I need to balance this with managing large amounts of money but you will know much more about what I am doing. It won’t be shrouded in mystery anymore.'

There were plenty more, but this last one is key. The mystery that was Neil Woodford has unravelled over the last few weeks.

Yes the novelty is likely to wear off at some point. But in the meantime it is impossible to ignore what is the biggest fund story in years.  

And perhaps one day we’ll be making some kind of pilgrimage to a little place just outside London to hear Woodford belt out Warren Buffett’s…sorry Frank Sinatra’s ‘My Way’...

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