Neil Woodford has announced the closure of the investment firm that carries his name after losing control of his flagship fund and speculation mounted over the future of his two remaining strategies.
Fund administrator Link Fund Solutions announced yesterday that the LF Woodford Equity Income fund would be wound up in January, a decision that the manager said he could not accept. It was suspended in June after a flurry of redemption requests.
The loss of control of the £3.1bn LF Woodford Equity Income fund posed questions of the underperforming Woodford Patient Capital investment trust and the smaller LF Woodford Income Focus fund. 
It prompted Woodford to make an announcement last night, resigning its management of the London Stock Exchange-listed Woodford Patient Capital Trust and the decision to close the firm.
“We have taken the highly painful decision to close Woodford Investment Management,” said Neil Woodford (pictured) in a statement.
“We will fulfil our fund management responsibilities to Woodford Patient Capital Trust and the LF Woodford Income Focus fund and once completed will close the company in an orderly fashion.
“I personally deeply regret the impact events have had on individuals who placed their faith in Woodford Investment Management and invested in our funds.”
Having launched the firm to great fanfare in 2014 following his departure from Invesco, in recent years Woodford has come under increasing amounts of pressure due to his outlook and illiquid holdings in unlisted companies.
Indeed, it has been a challenging 2019 for the manager across all three strategies.
Performance of funds YTD
Source: FE Analytics
Year-to-date, the LF Woodford Income Focus fund lost 12.8 per cent, while LF Woodford Equity Income fell 23.14 per cent and the Woodford Patient Capital Trust was down by 58.1 per cent.
Ryan Hughes, head of active portfolios at AJ Bell, said the closure of the firm “had a feeling of inevitability about it”.
“Without the fees from the equity income fund and with no performance fee coming from the Patient Capital Trust, it was difficult to see how the business could survive,” he explained.
“This creates further uncertainty for a larger number of customers and the key now is that they are given information about what is going to happen to their investments as soon as possible.”
Darius McDermott, managing director of Chelsea Financial Services, said it was “a very sad end for both his investors and his employees”.
“The whole situation has been awful for investors in the funds and the trust, and damaging for the industry,” he said. “At a time when people should be saving more, not less, and when UK equities are so out of favour, it is worrying that so much trust has been lost. We now need to work hard to get that trust back.” 
McDermott (pictured) said that Woodford had achieved excellent returns for many investors over a long period of time.
“That is why his new business was so popular. In all of this mess, I think it is important that we remember this,” he added.
“The last few years have been bad – there is no getting away from that – but this situation has come about from a very specific issue with one manager. The worst possible outcome would be that investors think all investments end this way and stop saving for their futures.”
Adrian Lowcock, head of personal investing at investment platform Willis Owen, said the decision to close the company was the right one and would put a stop to speculation, particularly around the future of Woodford Patient Capital.
“Woodford’s decision to step down from the board of Woodford Patient Capital Trust was no doubt a hard decision but given Woodford’s presence had become a distraction to the trust it was also the right thing to do,” said Lowcock.
The trust was launched in April 2015 to invest in early-stage, early-growth companies for investors willing to embrace a long-term ‘patient capital’ approach to investment.
Discount/Premium of Woodford Patient Capital since launch
Source: FE Analytics
According to data from the Association of Investment Companies (AIC), Woodford Patient Capital is currently trading at a discount to net asset value (NAV) of 46.17per cent, compared with a three-year average of 12.02 per cent. Since launch on 20 April 2015, it has made a loss of 65.54 per cent to 15 October 2019.