The decision to freeze withdrawals gives Woodford time to position illiquid holdings, the company said in a statement late Monday. While investments in unlisted securities are unusual for a mutual fund, Woodford hasn’t shied away from them.

Two of the top 10 holdings in Woodford’s main fund, accounting for about 7% of assets, were in private companies. A significant drop in size could undermine Woodford’s ability to run the fund effectively, Hargreaves Lansdown said in a statement explaining its decision to remove that fund and the Income Focus Fund from its list.

Freezing withdrawals "is a difficult to decision to make," said Emma Wall, Hargreaves’s head of investment. "It’s disturbing for investors. Any negative news like this is worrying. But it gives him the breathing space to get on being an investor rather than constantly worrying about redemptions. He can use these 28 days to offload illiquid assets, which he’s doing anyway.”

Eoin Treacy's view

I’m at a Marcus Evans fund managers speed dating event in Palm Springs at the moment. What I find particularly interesting is the exposure it gives me to the strategies being purveyed and where investment managers believe there is money to be made.

I sat in on a panel discussion yesterday where there was a lively discussion about the merits of Liquid Alternatives. The asset class was created in response to the desire for liquidity that arose from the fear of a repeat of the halted withdrawals that occurred during the credit crisis. Many people, however, have complained that the long/short strategies that characterise the product offering are closet trackers and fail to deliver the uncorrelated returns required by Modern Portfolio Theory. Instead they, to a man, recommending ditching liquid alternatives and buying bonds. That’s a clear testament to the fact the bond rally is forcing investment managers to participate because the momentum is beating everything else.

The second takeaway is the appetite among delegates for investments in private companies and real estate. More than a few people have told me they are setting up funds or are investing in funds that buy pieces of private assets. The number of private equity funds raising assets for investments in everything from artificial intelligence, tech real estate and other kinds of private deals was surprising to me.

However, the returns that have been achieved from these kinds of deals has been beyond what is available in conventional assets over the last decade. That is a factor of how much capital has been available as a result of extraordinary monetary policy which has been an enabler for technological innovation. As a result, conventional funds have been under a great deal of pressure to take positions in private assets because of the desire to cutely outperform.

If listed companies have an excess of intangible assets then private assets are the very definition of guesstimate asset values. That is where we have the clearest evidence of a bubble in this cycle. What Neil Woodford’s experience tells us is we do not have a clear idea of who owns private assets and in what quantities.