LONDON — One of Britain’s most prominent fund managers, Neil Woodford, believes that his counterparts have let down British industry by being risk-averse and impatient, and failing to invest in early-stage businesses.
Woodford, the founding partner of Woodford Investment Management and one of Britain’s leading fund managers, told the House of Lords’ science and technology committee on Tuesday: “We are too risk-averse as an asset management industry, and we’ve spent the last 30 years becoming more risk-averse.”
He added: “My industry thinks what I do — investing in early stage, illiquid businesses that require patience and engagement — is a very extreme minority sport. Very few do it.”
Woodford described himself as the biggest private sector investor in early-stage British science firms.
He said that Britain was “arguably the most productive nation in the world at translating money into great scientific output,” but added: “What we’re absolutely rubbish at is translating that into scaled commercial success.”
He said: “The bit that is missing is the scale-up capital. The responsibility for that glaring failure is the failure of my own industry, the fund management industry, the capital allocation industry, to embrace the long-term, patient capital approach.”
He said the pension fund industry had less than 8% of its capital allocation in UK industry, compared to more than 40% a decade ago.
Woodford suggested that the government should encourage investors to hold shares for seven or ten-year minimums to incentivise investment from savers into “early-stage, disruptive, scalable” science firms in the UK.
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