Former star fund manager Neil Woodford has re-emerged in the asset management world, advising on the same type of illiquid assets which ultimately led to his downfall last year.
Mr Woodford and his business partner Craig Newman are working with boutique investment firm Juno Capital as it builds a portfolio of unquoted healthcare companies.
As first reported by Sky News, Woodford Investment Management is working with the firm in an advisory capacity.
FTAdviser understands the relationship between Mr Woodford, his business partner Craig Newman and Juno Capital is quite informal. Mr Woodford is not an employee of the firm and is not managing money for its clients.
Juno Capital is an alternative investment manager, based in London’s west end, which works with family offices.
This is not the first time Mr Woodford has worked with unlisted healthcare assets and the liquidity issues at the crux of his demise were partly caused by a propensity to invest in unquoted healthcare stocks.
A bundle of healthcare assets held in his wound-down Equity Income fund were recently sold to Acacia Research for £224m — more than a year after the fund was suspended and seven months after it was announced the fund would be wound down.
Mr Woodford had previously been working with a group of family offices and private investors with a view to buying some of the unquoted assets in the stricken portfolios managed by Woodford IM.
Woodford IM declined to comment for this story.
Woodford’s woes
Mr Woodford’s investment management career came tumbling down last year when he was forced to suspend his flagship Equity Income fund on June 3.
Although the fund had been running with outflows averaging £9m per working day in May, Mr Woodford's representatives had played down fears about the fund's liquidity, saying outflows had become moderate and that the fund manager remained as confident as ever that his strategy would pay off.
But when Kent County Council asked to pull all of the £260m it had invested in the portfolio through its workplace pension, the fund did not have enough liquidity to meet the redemptions.
In October, the fund’s administrators Link Fund Solutions decided to wind down the fund. Later that day, Mr Woodford — the manager previously dubbed ‘the man who could not stop making money’ — walked away from his two remaining investment vehicles and announced he would close Woodford IM.
More than a year on, there is still about £220m of investors’ cash stuck in the illiquid assets at the crux of the saga, with little indication of when these will be sold. Some commentators have argued investors may be trapped in the wound-down fund for years.
Since the fund closed its doors to dealing on June 3 last year, investors have lost 50 per cent of any remaining cash in the fund. By comparison, funds in the Investment Association’s UK All Companies Sector have lost an average of 9 per cent.
