COMMENT: Jaws drop as fund chief Neil Woodford makes his noisy comeback

Neil Woodford was never known for his modesty. But even by his standards, his return to the City so soon after presiding over such calamity for retail investors is jaw-dropping.

Particularly as he declared his plans with what seems such a delusional version of the events of his downfall.

According to the Woodford world-view, his only fault was two years of underperformance in an otherwise unblemished career.

The main blame, he said, lay with the fund’s administrators, Link, for closing him down. 

In other news, black is white. Up is down.

Lest we forget, Woodford’s sins were not just a couple of years’ bad luck. He exposed hundreds of thousands of people to outrageous risks on illiquid, high risk stocks. As soon as people wanted to withdraw their funds, he had to sell the liquid stuff, leaving remaining investors even more exposed to the nitrogylcerine. This was an inexcusable weakness, baked in to the product he was selling. How did he fail to see the risks?  

When it became clear that the proportion of illiquid, unquoted investments went beyond the levels he was allowed, some listed on the Guernsey stock market, giving the impression they were easy to buy and sell.  He now says that was their call, not his. But he also says he effectively told them he’d ditch them if they didn’t. What choice did they really have? And he should have known such a listing didn’t really magically transform them into liquid assets overnight. 

Now, he’s setting himself up again as fund manager. Even as he awaits the outcome of an FCA probe into his behaviour.

At least he’s not asking the public for their money again. But, if he had to make a comeback, he should have taken a quieter approach, setting up as a private family office for a few years to prove himself before tapping the markets again.

Perhaps such humility is too much to ask.