Woodford exit sparks market and broker jolt

Michael Bow
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BRITAIN’S most powerful investor Neil Woodford announced plans to quit fund manager Invesco Perpetual yesterday to form a rival business, triggering a widespread sell-off of Woodford-related stocks.

Woodford, who looks after about £30bn of savings for people in the UK, said he would step down from the Henley-on-Thames based firm at the end of April 2014 after 25 years at the company.

Woodford said his departure was “based on my views about where I see long-term opportunities in the fund management industry”.

Invesco Perpetual boss Mark Armour said: “I understand that, after 25 years, he is ready for new challenges.”

Brokers moved to suspend their ratings on his two biggest funds, the £13.9bn High Income fund and £10.6bn Income Fund, following the shock announcement.

Companies part-owned by Woodford also fell due to the uncertainty over the future direction of the funds.

Close to half the firms which fell on the FTSE 100 yesterday – including G4S, Capita, BAE Systems and AstraZeneca – have Woodford as a top shareholder, sharpening concerns over the flight of capital which could follow his departure.

Invesco Perpetual’s owner Invesco fell in trading in New York, closing down 6.4 per cent, while the Edinburgh Investment Trust – the FTSE listed fund managed by Woodford – fell nearly five per cent.

Fund broker Hargreaves Lansdown suspended Woodford’s income funds from its list of top fund picks for new investors while Chelsea Financial Services also downgraded the funds to a hold. Fund research firm Morningstar also placed Woodford’s funds under review.