Woodford pulls plug on utility sector
Neil Woodford, one of the UK's leading fund managers, has sold his stake in a third water company after falling out of love with the utility sector.
Disenchanted: Neil Woodford has told utility regulators they are ignoring the needs of investors
The head of investment at Invesco Perpetual, who was Britain's largest utility investor for 20 years, has told regulators in the water and energy industries that they are ignoring the needs of investors, who have pumped hundreds of millions of pounds into renewing infrastructure in water and energy companies in recent years.
Invesco Perpetual's 9% stake in Northumbrian Water has now fallen to 4%. But a spokesman for the investor confirmed that Woodford had reduced his own shares to a level lower than 3%.
The veteran fund manager has also sold his entire holdings in United Utilities, owner of North West Water and Severn Trent.
The latest share sale brings his recent sales in the water sector to almost £500m.
Woodford said in his recent newsletter to shareholders that the sales 'reflected a concern that the regulated nature of the businesses could hamper their ability to provide a satisfactory return on equity to compensate for the risk of allocating capital to the sector'.
The water sector began a new pricing regime last April, which was widely acknowledged as a tough settlement. There have been fears that water firms will be unable to pay the hefty dividends on which funds like Woodford's depend.
He has also predicted that equity finance for infrastructure projects will remain unfulfilled.
The fund manager's fears for the utility sector were echoed by Charles Hendry, minister at the Department of Energy and Climate Change. He said that the big six energy companies could be driven from Britain if they are treated too harshly in any pricing investigation.
Most watched Money videos
- BMW's Vision Neue Klasse X unveils its sports activity vehicle future
- BMW meets Swarovski and releases BMW i7 Crystal Headlights Iconic Glow
- 'Now even better': Nissan Qashqai gets a facelift for 2024 version
- MailOnline asks Lexie Limitless 5 quick fire EV road trip questions
- Land Rover unveil newest all-electric Range Rover SUV
- Blue Whale fund manager on the best of the Magnificent 7
- 2025 Aston Martin DBX707: More luxury but comes with a higher price
- Mini celebrates the release of brand new all-electric car Mini Aceman
- Mini Cooper SE: The British icon gets an all-electric makeover
- Skoda reveals Skoda Epiq as part of an all-electric car portfolio
- How to invest for income and growth: SAINTS' James Dow
- Tesla unveils new Model 3 Performance - it's the fastest ever!
- CITY WHISPERS: Bill Ackman's cerulean eyes charm...
- Britain's nascent battery industry receives shot in the...
- Helium and hydrogen company set to join stock market in...
- Don't try to be a super woman - build a dream team! The...
- The plant that can add £10,000 to the value of your home...
- Cost-of-living crunch wipes shine off Thomas Sabo jewellery
- Where is Labour's 'white heat' revolution to revive...
- FTSE 100 hits an all-time high - but remember the stock...
- British businesses awash with 'accidental' bosses who...
- Shipping broker Clarksons on list of shame after...
- North Sea projects worth £21bn put at risk by Labour: Tax...
- Virgin Money's biggest independent investor...
- JOHCM UK EQUITY INCOME FUND: Rate cuts... and a spending...
- TONY HETHERINGTON: Boss behind firms fined £340k for more...
- Hollywood silly money? I'd only have stuffed it under the...
- MIDAS SHARE TIPS UPDATE: Wind is turning in Octopus...
- MIDAS SHARE TIPS: Why it soon won't be hip to give the...
- Cash in on the Northern property boom as our experts...