Invesco Perpetual and Millfield Group have defended star fund manager Neil Woodford's decision to pump millions of pounds into the loss-making IFA following the intervention of Hargreaves Lansdown's Mark Dampier.
Misys member Master Adviser suspended all dealings with Invesco last week after Woodford's decision to inject £10.5m into Millfield despite well documented financial difficulties. Invesco said it was disappointed with the move while Millfield chief executive Paul Tebbutt argued that the decision was an attack on the IFA sector.
But, in a letter to Money Marketing, Hargreaves Lansdown head of research Mark Dampier dismisses Tebbutt's suggestion and he backs Master Adviser director Doug Brodie in questioning Woodford's investment. He says that “nothing could be further from the truth” than Tebbutt's suggestion that Master Adviser was criticising IFAs as a whole and that Brodie was asking a simple question that many IFAs want answered.
He says: “All Mr Brodie is asking is why money is going into a loss-making company. This does not seem an unreasonable question. It is a simple question – can't we have a simple answer?” Invesco chief executive Mike Webb says: “Neil does not necessarily invest in a company because it is profit-making. It could be a turn-round situation.
“It is difficult to understand why an IFA would remove our funds from their buy list on the basis of one stockpick.”
Tebbutt says: “We have more companies invested in us than any other of our type on Aim. There is research from firms such as Durlacher showing that we should make a profit this year.”