Woodford Investment Management, the high profile fund manager set up by Neil Woodford, is to close after it lost most of its remaing fund management contracts.

The news follows the closure earlier this week of the Woodford Equity Income Fund. Investors in his funds are believed to be nursing losses of around 40%.

Many experts saw the closure of the once-mighty investment manager’s fund business as inevitable following a stream of errors and problems. Mr Woodford has spent most of this year trying to restructure the funds to salvage the business.

He hit back angrily earlier this week when Link Fund Solutions dismissed his firm as fund manager of the LF Woodford Equity Income fund and said the fund would be wound down.

Mr Woodford said the closure of the fund, a main part of his business, was something “I cannot accept.”

With little chance for the firm’s recovery the plug was finally pulled yesterday.

Neil Woodford had an enviable track record at Invesco for 25 years and became the darling of small investors for his consistent, long term returns. Investors with Woodform IM, however, tried to pull out their money as losses mounted and it emerged some investments made by the firm were difficult to cash in quickly.

Mr Woodford told the FT this week after announcing the closure of Woodford IM: “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 and invested in our funds.”

Ryan Hughes, head of active portfolios at AJ Bell, said: “The closure of Woodford Investment Management had a feeling of inevitability about it. 

“Without the fees from the equity income fund and with no performance fee coming from the Patient Capital Trust, it was difficult to see how the business could survive.

“This creates further uncertainty for a larger number of customers and the key now is that they are given information about what is going to happen to their investments as soon as possible.”

Link Funds says it will contact investors to explain the next steps.