Neil Woodford quits Invesco Perpetual Neil Woodford, one of the colossi of British fund management, is leaving Invesco Perpetual after a quarter of century, to pursue his conviction that modern investment has become too short term. The 53-year-old fund manager - who counts Warren Buffett as his hero - was singled out by a government-backed review last year as "the epitome" of the neglected art of investment for the long term. Shares in Invesco, the US parent, fell 5 per cent on the news, wiping $800m off the shares. Mr Woodford controls half of Invesco Perpetual's funds under management. and some financial advisers say that hundreds of thousands of unitholders will withdraw their money. Mr Woodford has £33bn under management - more than any other British fund manager - and one of the best performance records, having returned 23 times his investors" money over 25 years. "My decision to leave is a personal one based on my views about where I see long-term opportunities in the fund management industry," Mr Woodford said on Tuesday. He added that he hoped to set up a new fund management house in April when he leaves his Henley-based employer. He built his reputation as an activist investor who held stocks for a dozen years or more. In 2012, he told the Kay Review of equity markets that the investment industry needed reforming: "I am an exception... I take corporate engagement very seriously. The industry, I believe, is failing on this point. He was instrumental in blocking the merger of BAE Systems, the UK defence company, and EADS, Europe's biggest aerospace group, arguing that there was a danger that the merged company would become a "puppet" of the French and German governments. Prasaanna Jeyanandhan, analyst at Berenberg Bank, said: "In the UK, fund managers are brands and Woodford is the biggest brand. This is very negative [for Invesco Perpetual]. Nervousness [among investors] will lead to outflows from his funds, and therefore forced selling of some positions. As of August 30, Mr Woodford's largest portfolios were heavily weighted towards pharmaceutical and tobacco stocks. GlaxoSmithKline and AstraZeneca were the two largest holdings in both of Mr Woodford's flagship funds, with combined weightings of more than 17 per cent. Switzerland's Roche was also among the funds" top-10 holdings, alongside tobacco companies British American Tobacco, Imperial Tobacco and Reynolds American. Mr Woodford's funds also held 36.9 per cent of Stobart, the transport company, 29.6 per cent of Drax, 13.4 per cent of BAE Systems and 9.9 per cent of BT, as of October 2012. Invesco Perpetual said Mr Woodford would remain in place for the next six months before handing over his high-profile Income and High Income funds to Mark Barnett, a longstanding member of Invesco's UK equities team. Mr Barnett will also succeed Mr Woodford as head of UK equities. Reports of disquiet in Mr Woodford's team first emerged in 2001, when Sir Martyn Arbib, founder of Perpetual, sold the company to Atlanta-based Invesco, then known Amvescap, for £1.1bn. The Henley-based division continued to operate with a high degree of autonomy under the Invesco Perpetual name. One person familiar with Mr Woodford's thinking said the move was entirely amicable and had been on the cards for a while. "If you can do it, why wouldn't you?" this person said, adding that Mr Woodford had the support of his clients: "He has a long history of looking after them and putting them first." In evidence given in March to a parliamentary committee on the Kay review of UK equity markets, Mr Woodford expressed a desire to reform the "short-termist culture" that characterised the asset management industry. The incentive structures, Mr Woodford said, which affected the hiring and firing of fund managers, should be altered to encourage a longer-term perspective and greater engagement with companies. Mark Dampier, head of fund research at brokers Hargreaves Lansdown, described Mr Woodford's departure as a "complete surprise." He said a "huge amount of money" was likely to follow him to his new fund management group. Other advisers urged small investors not to act rashly. Jason Hollands, managing director of Bestinvest, said Mr Woodford and Mr Barnett had worked together for almost 20 years and their styles were very similar, "with a high crossover of stock names between their respective portfolios." Despite downgrading Mr Woodford's two flagship funds, Darius McDermott, managing director of Chelsea Financial Services, described Mr Barnett as the "heir apparent," although he has a "huge job ahead of him [as] there will no doubt be substantial outflows for him to deal with in the next six months." Hargreaves" Mr Dampier said "investors need not consider selling the fund now and I myself will be remaining invested." Rival fund houses Artemis, Rathbone Unit Trust Management and Threadneedle Investments are among the houses that could gain from any outflows from Mr Woodford's funds following recommendations from financial advisers. Mr Woodford's departure is the latest in a series of high-profile moves in UK asset management. In March, Richard Buxton, head of UK equity at Schroders, resigned after more than 11 years at Britain's biggest fund manager to assume the same post at rival Old Mutual. Schroders" flagship UK Alpha fund lost 40 per cent of its assets under management in the three months following his resignation. In July, Euan Munro, one of the main architects of Standard Life's flagship Global Absolute Return Strategies fund, announced that he was leaving the Edinburgh-based life assurer to take up the role of chief executive of Aviva's asset management business. He was made a Commander of the British Empire in June. Additional reporting by Tanya Powley, Emiko Terazono and Madison Marriage