Neil Woodford is one of Britain’s most successful and well-known fund managers. As former ‘head of equities’ at Invesco Perpetual he ran the ‘Invesco perpetual income’ and ‘Invesco perpetual High Income’ fund, collectively managing over £25bn in assets.
His long-term track record is nothing short of outstanding. Had you invested £10,000 in ‘Invesco Perpetual High Income’ fund at launch (in 1988), it will have grown to £250,000 today (total return).
For those choosing to receive dividends, they will have collected £38,943 in income, while their capital will have appreciated to £88,150.
This is an averaged annualised return of 13.2%.
Neil Woodfords approach is succinctly summed up by Mark Dampier, Head of Research at Hargreaves Lansdown:
“I have known and invested with Neil Woodford for over 20 years. He has remained consistent and true to his long-term investment philosophy, refusing to follow the herd and investing in unwanted, unfashionable and unloved sectors and companies. I believe him to be the finest fund manager of his generation and look forward to investing in his new fund at launch.”
Woodford typically holds shares for more than 10 years, he is the antithesis of short-term city culture.
For example in the 1960’s the typical investor through the London Stock Exchange held shares for eight years, today it is seven months.
CF Woodford Equity Income
Neil left Invesco perpetual in April to set up his own investment management business – Woodford Investment Management LLP
He subsequently launched a new equity income fund ‘CF Woodford Equity Income’, it became available to the public on June 19.
The fund will aim to generate an income of 10% higher than the dividend yield of the FTSE All-Share Index*.
It is predicted to yield 4.0% at launch, with income distributions paid quarterly and may invest up to 20% in international companies.
His aim – To deliver an attractive long-term return and growing income stream.
Patient Long-term capital
Neil Woodford also expressed an interest in early-stage science based businesses and highlighted Britain’s poor track record at turning great ideas into long-term commercial success. Neil believes the scarcity of capital and short-termism has created an compelling investment opportunity, he will devote between 5-7% of his fund to this area.
Woodford Patient Capital Trust plc
Elsewhere, Woodford has also announced his intention to launch the ‘Woodford Patient Capital Trust plc’, an investment vehicle which would give him the opportunity to build a greater exposure to early-stage and early-growth companies. He’s looking to raise £200m at launch.
The portfolio will represent a mix of their highest conviction blue-chip ideas together with exposure to early-stage and early-growth businesses. The fund will use an innovative fee structure, it won’t charge a management fee but will instead receive a fee based on performance.
Aim: Their aim is to deliver a return in excess of 10 per cent per annum over the longer term.
*The FTSE All-Share Index is an aggregation of the FTSE 100, FTSE 250 and FTSE Small Cap Indices