Beleaguered trader Neil Woodford has issued a second apology to investors in his frozen £3.7bn fund, saying he had been disappointed with its performance “for some time”.
The letter, which was sent to independent financial advisers yesterday, follows the suspension of Woodford’s Equity Income fund last week.
The flagship fund was suspended following a spike in investor redemptions.
“I realise this will be concerning and frustrating to you and I am deeply sorry for putting you in this situation and for the impact on your workload,” Woodford wrote.
“The performance of the fund has been disappointing for some time,” he said. He added that the underperformance was due to company specific issues and poor market conditions.
Woodford promised a more liquid portfolio when the fund reopens, but defended the fund, which he said was “undervalued”.
He said: “In my view, every position within the portfolio will continue to be united by one thing: under-valuation.
“Every asset in the portfolio has a fundamental value that significantly exceeds its share price. In some cases, in my judgement, the gap between value and price is as wide as I have ever seen in more than 30 years of public equity market investing.”
The letter came as Woodford faced pressure to back down and waive the fees on his fund.
Andrew Bailey, chief executive of the Financial Conduct Authority (FCA), and former business secretary Vince Cable called on Woodford to cancel charges for investors during the suspension.
Cable branded the decision to continue charging fees “unethical behaviour”.
“If I were an investor I would be outraged to be told that the fund won’t release my money but still charges for holding it,” Cable told City A.M.