Investment - Articles - Neil Woodford and illiquid assets

Celene Lee, Principal and Senior Investment Consultant at pensions and employee benefits consulting firm, Buck, comments:

 “The decision by Kent County Council pension fund to withdraw its £236m investment mandate from the Woodford Equity Income Fund has had damaging consequences, not just for Neil Woodford, but for the fund management industry as a whole. This week’s developments highlight the importance of having a regulatory portfolio cap on investing in illiquid assets. However, it’s important to realise that investing in these assets is not, and should not, be considered as unnecessarily risky.

 Illiquid assets can help investors meet their long-term investment strategy, and also provide potentially higher returns and diversification of their investment portfolio. Clearly, getting the balance right between illiquid and easy-to-sell assets is vital, but for investors who fully understand their investment objectives and appreciate the market and the risks involved, illiquidity should not be a dirty word.”

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