Know your biases: Don't catch a falling star

Revisiting old structures and practices

Clare Flynn Levy, CEO of Essentia Analytics, explains why the Neil Woodford saga is not about transparency; it is more to do with unchecked behavioural biases.

It is a tale as old as time: 'star' fund manager grows too fast, their style starts drifting as they're increasingly stretched, and it all ends in tears. Careers ruined, investors outraged, decision-makers humiliated, and everyone doing lots of finger-pointing. The Neil Woodford saga is the classic fallen star story, with all the usual twists and turns but with some modern touches such as a hedge fund-style liquidity crisis.  But none of it is unprecedented and with word on the street that for several years Woodford was deviating from a traditional equity income mandate, the new re...