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Woodford's exposure to private equity at all time high

by Danielle Levy on Mar 07, 2011 at 10:43

Woodford's exposure to private equity at all time high

Invesco Perpetual’s Neil Woodford has said he will continue to pressure companies to pursue share buybacks and says he is finding more value in private firms than at any point in his career.

In an interview with the Financial Times Woodford said. 'We’re bumping into a number of interesting investments that haven’t been quoted. We haven’t had this much exposure to unquoted companies since I joined Invesco Perpetual,' he said.

Woodford also expressed his desire to to engage in activist investing in the interview, commenting: 'Putting pressure on companies to return equity when there is a disconnect between the value of a business and a share price is becoming more prevalent and rightly so.'

Woodford also spoke about his involvement in efforts to persuade Vodafone's management team to take more control over the company’s assets.

'The company had a sort of absentee landlord approach to the portfolio,' he said. 'So, a number of shareholders began to put pressure on them to exercise more discipline.'

Woodford is also seeking to increase exposure to unquoted companies. 'We’re bumping into a number of interesting investments that haven’t been quoted. We haven’t had this much exposure to unquoted companies since I joined Invesco Perpetual,' he said.

Commenting on the fund's underperformance over the past two years, Woodford argues that he is a value investor stuck in a stock market that is being driven by momentum. Over the two years to the end of February Woodford's Invesco Perpetual Income fund has posted a 36.7% return while the FTSE 350 was up 55.8%, according to Lipper.

Nonetheless he remains positive that his value approach will win through.

'I’m not saying that we’re sitting back with our feet on the desk lighting up a large cigar. But we’re focused on fundamental values. We’re not going to ditch these [undervalued stocks] and play the fashion game. When the market improves, hopefully, we’ll enjoy better performance,' he said.

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