The City regulator has cast doubt on Neil Woodford’s comeback by saying it could veto the fallen star fund manager’s attempt to relaunch his career.
In an unusual move the Financial Conduct Authority said its decision on whether to authorise Woodford would require his new firm to be “ready, willing and organised” to comply with requirements and standards.
“That includes, for example, the sustainability of the firm’s business model and the fitness of its management,” Mark Steward, the FCA’s enforcement chief, said. Steward said the FCA’s investigation into Woodford’s previous business, which folded in 2019, was continuing.
The watchdog released its statement late on Tuesday evening after receiving queries about Woodford’s plan to launch a new business, WCM Partners. The collapse of Woodford Investment Management in 2019 left £3.7bn of investors’ assets in limbo.
The former idol of retail investors said at the weekend he was planning a new venture aimed at professional investors only. Investors in Woodford Investment Management will have lost about £1bn when the administration process is over. In his tearful interview Woodford revealed he had to sell his £30m estate when his firm collapsed.
Woodford said he planned to register WCM in Jersey. The FCA said it had agreed with the tax haven’s regulator to exchange information on any application by Woodford in either jurisdiction.
His attempt at a comeback prompted campaigners to raise doubts about his fitness and the FCA’s handling of the scandal.
Gina and Alan Miller, founders of the True and Fair Campaign for consumer protection, said his plan was “a very serious source of public concern”. ShareSoc, which represents small investors, said his return would be “a kick in the teeth” for the people whose money he lost.
Steward said the FCA’s investigation had been slowed down by the Covid-19 crisis. Woodford Investment Management imploded when Woodford’s bets on illiquid companies left him unable to repay investors who wanted their money back after the fund performed disastrously.
“I recognise the time taken to investigate causes frustration among those affected by a firm or fund failure and who are, understandably, looking for answers,” Steward said. “It is vital we investigate thoroughly and investigations are not limited at their outset.”
