These are grim times for Neil Woodford, not to mention tens of thousands of Britons who chose to place their nest eggs in his failing investment fund.
Fortunately for him the high-profile City bigwig will be able to escape from it all this summer, in a state-of-the-art luxury home.
Perched halfway up a cliff, in the Devon resort of Salcombe, the six-bedroom property cost £6.35million when Woodford, 59, and second wife Madelaine, the mother of his two children, bought it for cash in 2017.
At the time, his eponymous investment fund was riding high, having generated returns of roughly 40 per cent in three years, prompting the BBC to dub him ‘the man who can’t stop making money’.
These are grim times for Neil Woodford, not to mention tens of thousands of Britons who chose to place their nest eggs in his failing investment fund. Fortunately for him the high-profile City bigwig will be able to escape from it all this summer, in a state-of-the-art luxury home.
By way of celebration, Woodford decided to spend millions more pounds having his new holiday pile gutted, extended and rebuilt, with slate floors, wooden balconies, plus a new gymnasium, office, playroom and modern kitchen.
Described by its architect as a ‘high-specification 600 metres squared private dwelling fitted out to the highest possible standard’, the Salcombe property resembles a Bond villain’s lair. This is perhaps appropriate, since in appearance the bullet-headed, crop-haired fitness fanatic could almost certainly pass as a baddie from one of the movies.
Whatever now happens to his investors and their life savings, Woodford will certainly not be sleeping on the streets. The £60million or so he’s taken out of his company in fees and dividends during the past five years will see to that.
His main home, meanwhile, is a vast farm near Tetbury in the Cotswolds, ten minutes from Highgrove House, the country residence of the Prince of Wales. It is also 50 minutes from the Oxford office he commutes to via Porsche at 5am on workdays.
It was built on land that Neil and Madelaine purchased for £13.7million in 2013.
The couple, who are both very horsey, had decided to move from their previous residence in Buckinghamshire, following an unseemly public row over their failed attempts to build 28 stables and a dressage arena for their string of eventing horses.
Locals argued at the time that the development at the property, which was once owned by F1 tycoon Flavio Briatore, would despoil an area of outstanding natural beauty, and they compared the planned development to Auschwitz. Celebrity neighbour Jeremy Paxman dubbed it ‘enormous, unsightly, and environmentally unfriendly’ in a formal planning objection.
By way of celebration, Woodford decided to spend millions more pounds having his new holiday pile gutted, extended and rebuilt, with slate floors, wooden balconies, plus a new gymnasium, office, playroom and modern kitchen
Thankfully, there were no such issues in the Cotswolds, where the rambling Woodford estate now accommodates a vast equestrian complex around 200 yards from the main dwelling. It boasts indoor and outdoor arenas, a full-sized dressage menage (with mirrors), several blocks of stables and 19 outdoor ranges for some of the several dozen top horses the couple have in training.
The development, valued in the ‘low tens of millions’ by an equine source, allows the financier to indulge his hobby of amateur three-day eventing, which he took up in 2010 shortly after embarking on a relationship with keen rider Madelaine, a 47-year-old blonde.
Despite once telling an interviewer that he’d ‘fallen off far too many times’ while learning the ropes, Woodford is now something of an obsessive fan of what he calls a ‘fantastic’ and ‘exhilarating’ sport. Often to be seen perched on the back of his favourite horse, a stupendously expensive bay gelding from Ireland called Willows Spunky, he has spent at least three weekends since mid-April travelling the country to compete at amateur eventing contests.
Neil Woodford riding his horse, a bay gelding from Ireland called Willows Spunky
The development, valued in the ‘low tens of millions’ by an equine source, allows the financier to indulge his hobby of amateur three-day eventing, which he took up in 2010 shortly after embarking on a relationship with keen rider Madelaine, a 47-year-old blonde
Which explains why, on May 19 as his investment company teetered on the brink, Woodford could be found not at his office on a drab industrial estate in Cowley, but instead riding across a scenic estate at Tweseldown in Hampshire.
He performed well in the cross country and show-jumping disciplines, but let himself badly down in dressage, and came 12th out of the 15 entrants who managed to finish.
To those who have followed his career since its earliest days, Woodford’s passion for this poshest of equine sports comes as something of a surprise. For in financial circles, Woodford has built a reputation as a hard-nosed and somewhat aloof outsider.
A rugby-playing grammar school boy from Berkshire, whose father Victor printed postcards for a living (having served in the RAF during the war), he stands out like a sore thumb next to the public school Oxbridge types who dominate the fund management business.
While rivals wear pinstripes, he prefers a Steve Jobs-style uniform of black sweatshirts and jeans, teamed with what an interviewer once described as ‘watches so chunky they could double as gym apparatus’.
A rugby-playing grammar school boy from Berkshire, whose father Victor printed postcards for a living (having served in the RAF during the war), he stands out like a sore thumb next to the public school Oxbridge types who dominate the fund management business
Where others work out of swanky offices in Mayfair and the City, he’s worked in the provinces since joining investment firm Invesco in the late 1980s. At the time, Woodford was a hungry young Exeter University graduate (he’d studied agricultural economics) who had failed in his efforts to fly jets in the RAF after tests showed that he had insufficiently fast reflexes.
Perhaps appropriately, he achieved success with an old-fashioned, slow approach to investing, seeking out undervalued and often unfashionable stocks and holding them for the long term, rather than following the latest trends.
This helped him avoid not just the dotcom bubble of the late 1990s, but also the worst effects of the 2008 financial crash, after he successfully predicted that the mania for ‘debt-fuelled consumption’ was coming to an end. The approach was especially popular with ordinary investors, who piled their pension and ISA savings into Woodford’s funds throughout the era, though it earned him a certain reputation for arrogance in financial circles.
At Invesco, where he ran the Perpetual High Income Fund from 1988, a client who invested £10,000 at the start of his 25-year stint would have walked away with an astonishing £230,000.
By the end of his tenure, he was looking after £33billion on their behalf, meaning he controlled the largest stake in 30 of the FTSE-250 of leading companies.
Where others work out of swanky offices in Mayfair and the City, he’s worked in the provinces since joining investment firm Invesco in the late 1980s. At the time, Woodford was a hungry young Exeter University graduate (he’d studied agricultural economics) who had failed in his efforts to fly jets in the RAF after tests showed that he had insufficiently fast reflexes
Little wonder that Woodford became known in the trade as: ‘The man who made Middle England rich’. With a fitness regime designed to keep him working into old age, he also liked to invite comparisons with Warren Buffett, the legendary US investor who is now approaching his 90th birthday.
Such a track record meant that, when he left Invesco to set up on his own, in 2014, he was able to raise £1.7billion in funds from prospective clients in two weeks, a British record. Within a year, his firm was managing £7billion, and employing 35 staff.
Recent times have, however, seen a dramatic reversal in fortunes, with some wondering if the pressures of running his own company mean that he’s taken his eye off the ball.
Not only are Woodford’s ‘value’ methods firmly out of fashion – with modern investors choosing instead to pursue more glamorous opportunities in emerging markets, or technology stocks – but he’s also overseen a string of disastrous share picks.
Supposedly blue-chip firms such as Rolls Royce, Provident Financial and the AA have all suffered huge falls after being added to his portfolio, costing his fund huge sums. Meanwhile a string of speculative bets on smaller firms has also turned sour.
With increasingly nervous investors clamouring for the exit, and construction firm Kier, in which he owns a 20 per cent stake, falling by 40 per cent on a single day earlier this week, Woodford was forced to block investors from withdrawing from his fund.
Around £4billion now sits in limbo, with anxious investors unsure when they’ll be able to access their nest eggs, or what those savings will be worth in the future.
Woodford, of course, will not starve, but it’s nonetheless a blow for a man who has always had a lofty opinion of his own abilities.
Asked about his perceived arrogance, he once said: ‘A good fund manager has to have a balance of arrogance and humility. You need to be arrogant enough to back your own judgment, but humble in a way that makes you question everything.’
Today it is the people who trusted Neil Woodford with their life savings who are doing the questioning.
Investment boss who blocked savers from accessing their own money has pocketed £63 MILLION in just four years
by Matt Oliver and Lucy White for the Daily Mail
The fund chief who has frozen customers out of their savings has pocketed a £63million pay bonanza.
Neil Woodford and business partner Craig Newman have shared £100million between them over the past four years.
Yet investors, who have seen dismal returns of just 0.36 per cent over this time, have been banned from making withdrawals.
They had been scrambling to reclaim their cash after the value of his flagship fund tumbled following a series of bad bets.
Mr Woodford, 59, said he had to suspend withdrawals to give him time to restructure the fund.
But Luke Hildyard of the High Pay Centre said: ‘People will be outraged that a fund with such well-documented troubles could prove quite so lucrative for its owners, while those who have invested money in it, often on behalf of ordinary pension savers, lose out. Cases like this are terribly bad for the reputation of business and capitalism.
‘Broader questions should be asked about governance and incentives – when investment managers and business leaders can accrue such vast wealth for unimpressive performance, there isn’t much spur for them to a better job.’
Mr Woodford was once one of Britain’s most celebrated stock pickers and his funds have for years been recommended to savers as a way to grow their nest eggs.
He spent 25 years at American giant Invesco but in 2014 set up shop with his own fund, prompting many faithful investors to follow him with their money.
The Exeter University graduate does not take a salary but instead takes payment in shared profits and dividends. He and business partner Mr Newman, 48, have a 65 per cent and 35 per cent stake respectively.
In 2015 and 2016 they shared £47.5million in profits from Woodford Asset Management, according to Companies House. And in 2017 and 2018 the pair received dividends worth £49.2million overall from Woodford Investment Management.
It is understood that some of the cash will be used to pay their wages, with the rest reinvested or given to charity.
However, the huge payouts come after lacklustre performance from Mr Woodford’s flagship fund.
Mr Woodford, 59, said he had to suspend withdrawals to give him time to restructure the fund
Since it started in 2014, Woodford Equity Income has delivered savers only a 0.36 per cent return compared with a 29.2 per cent market average.
Performance over the past three years has been woeful, costing savers 17.5 per cent of their stake as a number of investments made by Mr Woodford have tanked.
After hitting a peak of £10.2billion two years ago, the fund’s size dropped to £3.77billion last month as investors made for the exit.
On Monday, Mr Woodford froze all cash withdrawals from Woodford Equity Income to prevent further outflows. This stops savers accessing their cash for at least 28 days.
He is thought to have taken the drastic measure after Kent County Council told him it wished to withdraw funds invested on behalf of pensioners.
The authority, which put £50million in Icelandic banks that collapsed in the financial crisis, has a stake worth a reported £250million.
A spokesman for Mr Woodford and Mr Newman declined to comment.