Campaigners demand independent investigation into Neil Woodford fund’s collapse

Gina and Allan Miller call for probe into demise of fund that cost savers £1bn after disgraced fund manager reveals plans for new venture

Neil Woodford shocked the City with plans to launch a new fund less than two years after the debacle that left investors with huge losses

Campaigners have called for an independent inquiry into the collapse of Neil Woodford's investment fund after the disgraced stock picker revealed that he is planning to set up a new company less than two years after the demise of his last.

More than 300,000 people lost money when Mr Woodford's flagship fund was wound up following a serious of disastrous investment decisions.

Gina Miller and Alan Miller, who run the True and Fair Campaign, said the lack of progress in investigating the fund’s collapse was “an insult to the hundreds of thousands of small investors whose lives have been turned upside down”.

In a letter to the Treasury Select Committee they said it was “shameful” that the Financial Conduct Authority (FCA) had allowed Mr Woodford to remain on its register of approved persons while an “investigation meanders on” 20 months after the fund was suspended.

Mr Woodford, once considered the City's star fund manager, had put ordinary savers' money into a series of small, risky companies that were not traded on active stock markets and did not have a publicly quoted price.

Many investors thought their cash had bought shares in large, publicly listed companies.

When performance deteriorated and savers rushed for the door, Mr Woodford’s investment company could not sell shares in the unlisted start-ups fast enough to meet the demand for repayments.

He maintains that he could have turned the fund around, given more time.

In an open letter to the committee, the Millers wrote: "We believe it ought to be a very serious source of public policy concern that high profile individuals such as Mr Woodford can be allowed to recommence trading, with the slate ostensibly wiped clean, when over 300,000 people, some of whom may be your own constituents, are scrabbling to make ends meet after seeing their life savings decimated and their prudent actions and hopes for a secure and comfortable future suddenly and unexpectedly dashed."

Around £2.5bn has been handed back to investors in the Woodford Equity Income Fund but £200m is still trapped. The fund had grown to £10.2bn at its peak in 2017 before declining rapidly to £3.7bn when it was suspended in 2019.

The FCA issued a warning on Tuesday night with head of enforcement Mark Steward stating: “Mr Woodford’s new business, WCM Partners Ltd, would need to apply for appropriate permissions before commencing any regulated activity in the UK.

“There are reports that Mr Woodford’s future business proposal may operate out of Jersey. We are in contact with the Jersey Financial Services Commission and agreed that we will both share information on any application made in our respective jurisdictions.”

Mr Woodford sparked anger amongst some in the City with his shock announcement, via an interview with The Telegraph, that he planned to return to the investment management business.

"I'm very sorry for what I did wrong," Mr Woodford told the newspaper. "What I was responsible for was two years of underperformance – I was the fund manager, the investment strategy was mine, I owned it and it delivered a period of underperformance."

The new fund will be available only to professional investors and high net worth individuals.