One of Britain’s most prominent equity fund managers says that there is no option for Greece but default.
Invesco IVZ -0.21% Perpetual veteran, Neil Woodford (pictured), who left the company after a quarter of a century to set up his own asset management firm last year, said that “Greece will never be able to function as a democratic society if it wants to pay back its debt” and that it would be “sadistic to suggest it could.”
Speaking at a dinner in London, Mr. Woodford, of Woodford Investment Management LLC, said that “it is completely unreasonable” to expect a simple solution to the standoff between Greece’s new anti-austerity government and the country’s international creditors.
“Someone has to blink first and it’s not going to be [Greek governing party] Syriza.”
Mr. Woodford has no direct exposure to Greece, but he has had an enduringly influential role as one of the U.K.’s top fund managers. At Invesco Perpetual, he oversaw around £27 billion ($41.3 billion) across six different funds, scoring returns of about 12% annually in his last five years there.
Around 84% of Mr. Woodford’s fund holdings are in the U.K., followed by around 7.5% in the U.S. and 3% in Switzerland.
Mr. Woodford’s comments come at the end of a week where bond, stock and currency markets across the whole region have been roiled by Greek volatility.
On Thursday, Germany dismissed Greece’s request for bridge funding that would give it three months to negotiate new bailout terms, insisting that the newly-elected government implement the conditions tied to its agreed program. That comes after the European Central Bank said Wednesday evening that it would stop accepting Greek bonds as collateral for central bank loans, sending Greek markets into a tailspin.
Stocks in Piraeus Bank SATPEIR.AT -5.76%, National Bank of Greece SAETE.AT -11.40%, Alpha Bank AE ALPHA.AT -11.76% and Eurobank Ergasias SAEUROB.AT -9.40% took a particular beating and are all down more than 20% since the start of the year.
Mr. Woodford, who is known for contrarian views and in 2008 sold out of U.K. bank stocks before the worst of the financial crisis, launched his new fund under Woodford Investment Management — the CF Woodford Equity Income Fund — in June last year.
The fund attracted £1.6 billion of investment during a two-week initial offer period in June and by the end of December 2014 had grown to around £4.3 billion.
Top holdings include AstraZeneca AZN.LN -1.37% PLC, GlaxoSmithKline GSK.LN +1.13% PLC, Imperial Tobacco IMT.LN +0.76% PLC, British American Tobacco BATS.LN -1.65% PLC, BT BT.A.LN +0.23% PLC and Capita PLC.
On Friday, he announced WIM’s intention to launch the Woodford Patient Capital Trust, an investment trust aiming to target an issue of £200 million, with a strong focus on what Mr. Woodford dubs “early-growth companies”.
