UPDATE 6-Fund empire of once-star manager Neil Woodford shuts

* LF Woodford Equity Income Fund to be wound up

* BlackRock to sell off listed assets

* PJT Partners to continue to sell illiquid assets

* BoE's Carney highlights structural issue in open-ended
funds
(Recasts with details of Woodford quitting as manager of his
remaining two funds)

By Simon Jessop, Sinead Cruise and Carolyn Cohn

LONDON, Oct 15 (Reuters) - Famed British money manager Neil
Woodford shut his asset management business on Tuesday, calling
it quits hours after administrators stepped in to wind down his
flagship fund and sack him as its manager.

Woodford, one of Britain's most high profile investors, had
been battling to save his company since June after a flood of
investor redemption requests forced him to suspend withdrawals
in his flagship LF Woodford Equity Income Fund.

He had been trying to liquidate some of its holdings with
the aim of reopening the fund in December, but on Tuesday
morning its corporate director Link Fund Solutions said the
process had not gone as planned and it was to close the fund.

Woodford initially slammed the decision as wrong, but by
Tuesday evening said he was to stop managing his remaining two
funds - the listed Woodford Patient Capital Trust and
the LF Woodford Income Focus fund.

"We have taken the highly painful decision to close Woodford
Investment Management," he said in a statement.

"I personally deeply regret the impact events have had on
individuals who placed their faith in Woodford Investment
Management and invested in our funds."

The closure of his business marks a dramatic fall for
Oxford-based Woodford, who made his name at Invesco Perpetual
after avoiding the collapse of the tech bubble at the turn of
the century.

After more than two decades at Invesco, he set up his own
firm in 2014, quickly amassing billions in mostly retail
investor assets, much of it from investment platform Hargreaves
Lansdown, which continued to back the troubled fund
right up to its suspension.

At its peak his business managed more than 14 billion pounds
($17.90 billion).

But the past two years saw his investments in a string of
British companies he said were undervalued perform poorly,
leading to an increase in demand from clients to take their
money back.

Woodford also tried to build up stakes in a number of
unlisted technology and healthcare companies he believed had
strong growth potential. But these exacerbated his troubles once
the redemption requests came in, causing his fund to fall foul
of rules on the proportion of illiquid assets it was allowed to
hold.

These investments became a focal point for regulators and
lawmakers after his flagship fund was suspended -- especially as
Woodford continued to charge investors management fees.

Bank of England Governor Mark Carney said on Tuesday that
the closure should act as a reminder of the structural problems
in open-ended investment funds like Woodford's, which allow
investors to take their money out any day they like.

The BoE and the Financial Conduct Authority (FCA) will spell
out how investors can pull cash from open-ended funds in
December, following a review.

A source close to Woodford told Reuters earlier on Tuesday
that Link's decision was a "complete surprise" and the manager
had only learnt of Link's intention to close the fund late on
Monday.

FALLEN STAR

For Woodford's flagship fund - which has around 3 billion
pounds remaining - Link has tasked Blackrock Advisors to
sell its listed assets while PJT Partners will continue with its
previously agreed role in selling the fund's illiquid assets.

BlackRock will switch the portfolio into money market funds
for investors posted online. Filings on Tuesday showed Woodford
had already transferred over holdings in at least 10 stocks to
Blackrock.

The winding up of the LF Woodford Equity Income Fund -
which will be stripped of Woodford's name - will begin on Jan.
17, 2020, Link said, when investors should receive an initial
payment.

It is unclear what will happen to the management of his two
other funds.

Darius McDermott, managing director of financial adviser
Chelsea Financial Services, said the situation was "a mess" and
the flagship fund's closure would make it "a forced seller of
all stocks."

Britain's Treasury Committee of lawmakers "will want to
examine what lessons can be learned from this saga", interim
chair Catherine McKinnell said.

Hundreds of thousands of retail investors had money in the
closed fund.

Nooman Haque, a banker whose family invested 10,000 pounds,
said Woodford's decision to continue charging fees during the
suspension "did not endear him to investors."

Link said in a Q&A for investors that fees would still be
paid to BlackRock and other service providers, although it would
forego its own fee for acting as authorised corporate director.

Mark Robinson, a property investment manager who invested
around 5,000 pounds on behalf of his children, said the funds
industry needed to learn from the "debacle".
($1 = 0.7820 pounds)
(Writing by Rachel Armstrong
Editing by Susan Fenton and Franklin Paul)