Neil Woodford, the U.K. money manager whose departure sparked the biggest selloff in Invesco Ltd.’s shares in two years in October, will join Oakley Capital Management Ltd. to create a new asset-management business.
Oakley, founded by entrepreneur Peter Dubens, said Woodford will start on May 1 and manage money for retail and institutional clients from Oakley’s offices in London, according to a statement. Woodford, 53, oversees about 33 billion pounds ($54 billion) for Invesco Perpetual.
Woodford became one of the U.K.’s best-known mutual fund managers by picking stocks that fit his view of the larger economy and avoiding bank shares before the crash in 2008. The announcement of his departure from Invesco after more than two decades wiped off almost $1 billion of market value.
“Neil isn’t going to have any trouble raising money for whatever it is he wants to do,” said Darius McDermott, managing director at Chelsea Financial Services, an investment adviser in London, by telephone. “I was a little surprised by the news. Oakley is a specialist private-equity investor and has nothing in common with Neil’s retail background.”
Invesco has a 32 percent stake in Oakley’s Bermuda-based investment company that trades on London’s Alternative Investment Market, according to data compiled by Bloomberg. Oakley Capital oversees about 1 billion pounds in assets and supports businesses including Oakley Capital Private Equity, an investor in Time Out magazine.
A spokeswomen for Woodford declined to comment on today’s appointment, while a spokeswoman for Oakley declined to provide details of the arrangement beyond the statement.
“We fully support his desire to create his own transformational asset management business,” Oakley’s Dubens said in the statement. “We will provide an environment in which Neil can have the autonomy and flexibility to best serve the interests of clients.”
Analysts including Michael Kim, at Sandler O’Neill & Partners LP in New York, have said that Invesco may see client defections when the veteran fund manager leaves next year.
Woodford’s Invesco Perpetual High Income Fund has returned 13 percent annually in the past three years, outperforming 85 percent of competitors, according to data compiled by Bloomberg. It counts GlaxoSmithKline Plc, AstraZeneca Plc, BT Group Plc and BAE Systems Plc among its biggest holdings.
“If Neil does a retail offering of similar nature that is readily available for people to buy, then you could easily see further flows out,” Chelsea’s McDermott said. “In this instance we would follow the man” rather than the firm.
Invesco named Mark Barnett head of U.K. equities and will take over Woodford’s high-income fund and the Invesco Perpetual Income Fund, which had a combined 24.1 billion pounds in assets at the end of October.
Oakley’s Dubens, 47, has for over two decades managed the acquisition and restructuring of firms and he formed online sports information company 365 Media Group Plc and Pipex Communications Plc, according to the company’s website. 365 Media was sold for more than 102 million pounds in 2007 and the main operating units of Pipex, a U.K. Internet and telephone company, were sold for about 370 million pounds.