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Fallen star fund manager Woodford cuts stake in Purplebricks as his entire empire crumbles

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Thu 17 Oct 2019

Fallen star fund manager Woodford cuts stake in Purplebricks as his entire empire crumbles

Woodford Investment Management cut its stake in Purplebricks to less than 5% as his entire investment empire lay in ruins yesterday.

Woodford previously held a stake of 15.53% in the business, having already scaled back its holding several times.

The transaction both took place and was notified to the stock exchange yesterday.

The RNS gave no further information and did not specify what the stake of under 5% actually now is.

Woodford’s sale of shares in Purplebricks yesterday was part of a spectacular fall from grace for Neil Woodford.

He was first fired from one of his funds, the Equity Income Fund, and then yesterday announced he was standing down from his Patient Capital Trust and Income Focus Funds.

According to the Mail today, Woodford must now serve a six month notice period at the Income Focus Fund and three months at the Patient Capital Trust, as he winds down his entire empire,  the over-arching Woodford Investment Management.

Yesterday evening, Woodford said in a statement: “We have taken the highly painful decision to close Woodford Investment Management.

“I personally deeply regret the impact events have had on individuals who placed their faith in Woodford Investment Management.”

The closure of what had been Purplebricks’ major investor will mean the potential loss of up to 45 jobs at Woodford. Savers in, notably, the Equity Income Fund, face massive losses after being blocked from making withdrawals since June, with calls for a Parliamentary enquiry.

The collapse of the Woodford empire will also bring the Financial Conduct Authority under pressure after accusations that it failed to spot problems before it was too late.

The Telegraph today is calling the collapse as one of the most stunning reversals in City history.

As the biggest shareholder in Purplebricks, owning some 29%, Woodford – described before his downfall as the man who couldn’t stop making money –  slashed that stake to almost 24% in June this year, and has continued to reduce it since.

Purplebricks latest annual report, published last month, showed Woodford having a 19.26%, stake, behind Axel Springer with a 26.57% holding.

Yesterday, shares in Purplebricks rose almost 3% to finish at about 112p. Of particular interest in the days to come will be to see who might have bought the massive stake in Purplebricks that Woodford has sold for an estimated £35m.

* Separately yesterday, Countrywide shares continued to rise for a second day running. They went up nearly 6% to finish at almost 5p.