Fund manager Neil Woodford, whose retail fund empire crumbled less than two years ago, is to stage a comeback with a new investment business.

In an interview with the Daily Telegraph Mr Woodford said that he planned to launch a new institutionally-focused fund manager called Woodford Capital Management Partners (WCMP).

He plans to team up with US-based Acacia Research, to launch a bio-tech fund from Jersey.

Mr Woodford has invested in Acacia Research via his failed Woodford Investment Management (WIM) business and Acacia has bought investments back from the shuttered Woodford funds.

WIM administrator Link Fund Solutions wound up the Woodford funds following poor investment performance and spate of problems for investors who found themselves unable to withdraw funds due to a number of illiquid investments made by the funds.

Administrators have been gradually selling off investments held by the Woodford funds including the former Woodford Equity Income Fund. So far almost £2.5bn has been distributed to investors since the fund began winding up.

Mr Woodford told the Telegraph in an interview that he was angry that Link closed the funds before he had a chance to turn performance around. He apologised for two years of poor performance but says he could have fought back. He added that he did want what happened to the WIM funds to be his epitaph.

A number of commentators have expressed surprise about his return to investment management while his previous funds are still being wound up and lawyers are planning class actions on behalf of investors.

Ryan Hughes, head of active portfolios at AJ Bell, said many investors would be sceptical.

He said: “The news that Neil Woodford is looking to make a comeback will come as a surprise to many, especially those thousands of embattled investors who are still waiting to get the last of their money back. 

“With around £200m of money still stuck in his previous fund and original investors back in 2014 sitting on losses of over 25% and many thousands who invested later suffering much bigger losses, there will be little sympathy for Woodford and the comments he made in his recent interview. While some investors may well agree with Woodford’s view that investors would have been better off if his fund was not forced to suspend and liquidate, others will simply be glad that they have got some of their money back after being stuck for many months and will want to finally move on from this sorry saga.

“The potential new investment vehicle looks like it will be aimed at professional investors only with the investment approach once again focused on niche, higher risk, potentially illiquid investments that Woodford had such conviction in for his previous fund. While he may well be right that there are some great companies to invest in, his track record showed that it is very hard to identify them and many need years of funding before they become successful, with plenty falling by the wayside along the way. Ultimately, it looks as if Woodford is looking for vindication that his original investment strategy was correct all along.”

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