Neil Woodford’s equity fund, the Woodford Equity Income Fund (WEIF), collapsed in 2019 after having managed over US$13 billion (£10 billion) at its peak in 2017. The fund, launched by Woodford Investment Management (WIM) in 2014 following Woodford’s successful investment career at Invesco Perpetual, attracted significant retail and institutional investment. However, poor performance and a high exposure to illiquid, unquoted stocks led to a crisis. Between July 2018 and June 2019, Woodford made “unreasonable and inappropriate investment decisions,” selling liquid assets and increasing illiquid holdings, leaving only 8% of the fund’s assets realisable within seven days, far below the required liquidity standard for retail funds of four days. This issue, and concerns about performance, triggered a wave of redemption requests, exacerbated by large withdrawals from institutional investors such as Kent County Council, which forced the fund’s suspension in June 2019. WEIF’s value plummeted to US$4.7 billion (£3.7 billion), and its eventual liquidation left investors with US$1.3 billion (£1 billion) less than their initial investments.
On August 5, 2025, the U.K. Financial Conduct Authority (FCA) fined Woodford £5.9 million and banned him from holding senior financial roles. Also in August 2025, WIM faced a £40 million penalty, totaling £46 million in fines. The FCA criticized Woodford for failing to manage liquidity and for his narrow understanding of his responsibilities. Woodford and WIM are appealing, and latest reports indicate the case is unlikely to be heard at trial before 2027. The blame, they argue, lies with Link Fund Solutions (LFS), the fund’s authorized corporate director and fund administrator, for mismanagement and for the decision to liquidate. As with other failures described in Famous Frauds & Financial Failures (e.g., Chapter 8 on Mark Nordlicht and Platinum Partners), the decision to liquidate the fund created a fire sale. Woodford argues that a controlled realization would have generated much better recoveries for investors.
LFS reached a settlement agreement with the FCA in 2024 over its role in the fund’s collapse. As part of the agreement, LFS has provided redress to affected investors through a compensation scheme worth up to £230 million. As a result, LFS avoided a £50 million fine from the watchdog.
Hargreaves Lansdown, the U.K.’s largest seller of retail investment products, promoted Woodford’s flagship U.K. Equity Income Fund. Around 5,000 people are suing Hargreaves Lansdown, claiming its investment site continued to recommend Woodford’s fund right up until it collapsed. Almost 300,000 people had invested in the fund through Hargreaves Lansdown, accounting for £1.6 billion of its total £3.7 billion.
The scandal has damaged trust in U.K. retail fund management, prompting ongoing litigation and calls for Woodford to lose his Commander of the (Order of the) British Empire (CBE) award.
Sources:
Neate, Rupert (2019), “Neil Woodford Blocks Investors from Pulling Cash from Flagship Fund,” The Guardian, June 3: https://www.theguardian.com/money/2019/jun/03/neil-woodford-blocks-inve…
No author listed (2019), “Britain’s Markets Regulator Investigates Woodford Fund Suspension", Reuters.com, June 18: https://www.reuters.com/article/economy/britain-s-markets-regulator-inv…
No author listed (2019), “Britain’s Best Known Stockpicker Forced to Shut Down Embattled Flagship Fund,” CNBC.com, October 15: https://www.cnbc.com/2019/10/15/star-uk-fund-manager-woodford-forced-to…
Waite, Suzy, & Kumar, Nishant (2019), “Woodford Confronts Career Crisis after Freezing Fund Withdrawals,” Bloomberg.com, June 4: https://www.bloomberg.com/news/articles/2019-06-03/neil-woodford-s-equi…