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Woodford attracts record £1.6bn for new fund

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Woodford attracts record £1.6bn for new fund

Woodford Investment Management (WIM) has raised a record £1.6 billion during the offer period for its CF Woodford Equity Income fund.

The offer period, which began on 2 June, closed at noon on 19 June 2014. Daily pricing of the fund, run by Citywire A-rated Neil Woodford, started on 20 June 2014 and he said the portfolio is now 95% invested.

According to WIM this is the biggest fund raise for an Oeic or unit trust. It dwarfs recent high profile launches, including the £270 million raised by Richard Buxton for his Old Mutual UK Alpha fund and the £250 million generated from the launch of Philip Gibbs' Jupiter Absolute Return fund.    

To put the figure into further context, the most recent data from the Investment Management Association showed gross sales into the UK Equity Income sector stood at £1.5 billion in April, in line with March figures.

Since Woodford announced his resignation from Invesco Perpetual last October, the firm's Income fund, now run by AA-rated Mark Barnett, has seen assets fall by £2.8 billion from a high of £10.8 billion.

Craig Newman, chief executive of WIM, said: 'We are thrilled to have had such support from investors. We understand the great responsibility we have been given to deliver the long-term investment returns they anticipate and we are committed to achieving that objective.'

Woodford (pictured) added: 'I am really excited with the portfolio that I have been able to build for this fund.

'I have met businesses in recent weeks that have immense potential and offer fantastic investment value. My entire focus is finding companies like this that I believe can deliver long-term value to the investors that have the confidence to invest in my fund.'

The £1.6 billion is likely to surprise some who had not expected such a high figure.

These include Canaccord Genuity Wealth Management investment director Justin Oliver, who told Wealth Manager in May the fund would raise 'well north of £100 million’ but ‘not anywhere near £1 billion’. 

Others will be less mystified by the figure given the fund's backing from major platforms.

These included Peter Sleep, a senior investment manager at Seven Investment Management, who had pointed out that Hargreaves Lansdown distributes flows of around £2 billion a quarter and Cofunds around the same. He believed Woodford could easily attract 10% of this, meaning the fund could hit £500 million very quickly.

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