Neil Woodford apologises to investors after freezing flagship fund

Neil Woodford has apologised to investors in a Youtube video after they were blocked from withdrawing money from his flagship fund.

The fund manager said the decision to suspend trading in the Woodford Equity Income Fund was necessary to protect investors.

Read more: Neil Woodford’s flagship fund suspends trading

A spike in withdrawals, including a £250m request from Kent County Council, prompted the decision to freeze the fund on Monday.

Woodford said he would use the time to reduce the fund’s exposure to illiquid and unquoted stocks down to zero.

“As difficult a decision as this is, and clearly frustrating for you, our investors, we felt that this was necessary to protect your interests,” Woodford said.

“The situation we confronted was that we were seeing a lot of outflow in the portfolio.

“As a result of that what we were seeing in a way was the stock market anticipating the fact that we would have to be sellers of stocks to meet those redemptions.

“We felt the prices that we would be able to achieve in order to meet those redemptions would be disadvantageous for our investors.”

Read more: Neil Woodford’s flagship fund drops £560m assets in four weeks

Assets in the fund have fallen from a £10.2bn peak two years ago to £3.77bn last week, according to Morningstar.

The ratings agency slashed the fund from bronze to neutral last month following “persistent redemption requests”.