Neil Woodford, Britain’s celebrated super investor, secured a deal to manage £3.6bn of investors’ cash from money manager St. James’s Place (LSE: STJ).
St James’s Place was promoted to the FTSE 100 in March, and the shares are up 16% since the beginning of the year, adding 6p to 842p during early trade this morning.
Around half of St James’s Place customers — some 200,000 people — have their money in three funds run by Woodford, UK High Income, Income Distribution and UK Equity, which will continue to be managed by the renowned stockpicker after he leaves his role at Invesco Perpetual.
Neil Woodford has worked at Invesco Perpetual for 26 years, but will leave his employer at the end of April to establish his own firm, Woodford Investment Management (WIM).
St James’s Place is withdrawing a total of £7.7bn of client funds from Invesco, with £3.35bn going to fund manager Threadneedle, alongside the cash going to Woodford’s new firm.
Woodford Investment Management is yet to receive regulatory approval, but today’s move by St James’s place can be seen as a ringing endorsement.
Woodford’s replacement at Invesco, Mark Barnett, took control of Woodford’s flagship funds at the beginning of last month. He is a similarly long-term investor, who only buys companies he has “conviction” in.
Of course, not everyone has the luxury of being able to afford an expensive fund manager. Indeed, in most instances, taking into account all fees, a simple index fund will produce better results.