A top fund manager has stopped savers pulling their cash out of an investment pot managed by his firm after Kent County Council became the latest investor to try and withdraw millions of pounds because the scheme has performed poorly.
Neil Woodford launched his company Woodford Investment Management thanks to his a stellar reputation for getting returns for investors during his time at Invesco Perpetual.
However, he has frozen access to his Woodford Equity Income Fund, which had managed assets worth about £10 billion, after it saw its value plunge to less than £4 billion following an exodus of investors.
The action, which is expected to last for at least 28 days, is thought to have been triggered after Kent County Council reportedly asked to withdraw £250 million from the key pension investment fund.
It is said to have formally given Woodford Equity Income fund notice of its intention but it is not clear why.
As a result of the request, Neil Woodford said after "an increased level of redemptions", investors would not be allowed to "redeem, purchase or transfer shares" in the fund.
According to media reports, investors have withdrawn about £560m from the fund over the past four weeks.
However, it has been reported that it was a request from Kent County Council to withdraw £250m that led to the suspension.
This means means the council will not be able to access its funds until further notice.
Kent County Council has reassured pension holders after the bid to withdraw the £263m investment was controversially left in limbo.
In a statement, the council said its pension committee had flagged up concerns about the performance of the fund in March.
It said: “At this stage there is no loss to the pension fund, and whatever the outcome there will be no impact on the council’s cash reserves or service provision.”