Britain's best known portfolio manager apologized to investors after being forced to suspend trading on his flagship fund after mounting losses and withdrawals.

Neil Woodford, who launched Woodford Investment Management in 2014 after a successful spell at Invesco Perpetual, posted a YouTube video late Tuesday in which he explained the decision and offered an emotional apology to the thousands of investors affected by the suspension.

The firm announced Monday that it would suspend all trading in the Woodford Equity Income fund after the redemption of a £250 million ($318 million) investment from local authority Kent County Council.

In the three-minute video, Woodford said his current strategy is to reduce the fund's exposure to illiquid and unquoted stocks to zero, a process which was made "much more difficult" by massive outflows from the fund.

At its peak, the fund managed £10.2 billion of assets, but according to financial services and research firm Morningstar, that had shrunk to just £3.7 billion as of the end of May.