Neil Woodford has issued an emotive apology to clients in his gated £3.7bn Woodford Equity Income fund, admitting he had been unhappy with the performance “for some time” and promising a “more liquid portfolio” when the fund reopens.
The letter, sent to independent financial advisers and other intermediaries on Tuesday is the embattled fund manager’s latest apology to investors locked in his troubled fund following its suspension on June 3, following a deluge of outflows.
Mr Woodford said he was “sorry for putting [clients] in this situation” and said he understood there had been “company specific issues within the portfolio”.
“I realise this will be concerning and frustrating to you and I am sorry for putting you in this situation,” he said.
But he also defended his portfolio, which he said was “undervalued” and had been the victim of a “largely valuation-insensitive” market.
Mr Woodford said: “Every asset in the portfolio has a fundamental value that significantly exceeds its share price,” he said, adding “in my judgment, the gap between value and price is as wide as I have ever seen in more than 30 years of public equity market investing.”
It follows the investor’s race to sell down illiquid stocks in a bid to lift the fund’s share suspension amid sliding share prices at many of his holdings. Mr Woodford said he would turn the fund around.
“When the fund reopens, investors will see a much more liquid portfolio, but one which reflects the same investment strategy” he said.
Tuesday’s letter came as it emerged Mr Woodford risked being ejected from his listed namesake trust, Woodford Patient Capital. The board of the trust is understood to be engaged in discussions with its broker Winterflood Securities about terminating its contract with Woodford, according to two people close to the situation.
It is the latest blow for Mr Woodford, who is facing calls from the influential Treasury select committee to drop his fees while the fund is suspended.
Woodford Investment Management has set up a dedicated online help centre, according to the letter sent out on Tuesday, and Mr Woodford will be taking part in live question and answer sessions fielded by clients.
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