Tuesday 7 January 2020 10:36 am

Neil Woodford and partner bagged £13.8m in year before empire collapsed

Neil Woodford and his partner Craig Newman were paid almost £14m in dividends in the year leading up to the fund crisis that ultimately brought down their company.

For the year ending 31 March 2019, Woodford Investment Management’s profit more than halved, falling from £33.7m to £16.3m, according to accounts submitted to Companies House. 

Read more: How Neil Woodford’s star came crashing down to earth

The accounts also reveal that the company paid out £13.8m in dividends to Woodford Capital, which is entirely controlled by Woodford and his chief executive Newman. 

The pair have a 65 per cent and 35 per cent stake in Woodford Capital respectively, entitling Woodford to £9m of the dividends and Newman to £4.8m.

The accounts cover the period in which investors began to pull money out of funds controlled by Woodford as his company’s performance began to deteriorate, but do not cover the suspension of his flagship Equity Income Fund in June. 

The fund was suspended after becoming overwhelmed by investor withdrawal requests, and remained frozen until administrators announced in October that the fund would be shut down, with Woodford fired as its manager.

Shortly afterwards, Woodford resigned as manager of his two remaining funds, Woodford Income Focus and the listed Woodford Patient Capital Trust, and announced the closure of Woodford Investment Management. 

The accounts note that after the period covered ended, the “underperformance” of the Equity Income Fund “combined with a period of sustained and negative press coverage” led to the fund’s suspension.

“Measures have been taken to re-shape the business in light of the reduced revenue expectations,” they continue.

“The accounts relate to the financial year before the Equity Income Fund was suspended,” said a Woodford spokesperson.

“We can confirm that the partners did not take any profits or income during the fund’s suspension nor was any management fee earned from managing Woodford Patient Capital Trust.” 

Read more: Timetable set for Neil Woodford fund repayments

Administrators are due to begin the process of winding up the Equity Income Fund on 18 January, with the first repayments to investors expected in late January. 

Schroders has taken over the running of Woodford Patient Capital Trust, while Aberdeen Standard Investments are set to take over the smaller Income Focus Fund.

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