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UPDATE 1-Woodford learnt little from financial crisis-UK lawmaker

Simon Jessop and Carolyn Cohn

* Fund manager learnt little about risk from crisis-lawmaker

* To hire PJT Park Hill to sell unlisted stakes - source

* Assets in other open-ended fund fall below 300 million pounds (Recasts, adds background, share, AUM moves)

LONDON, June 26 (Reuters) - Neil Woodford, one of Britain's best-known money managers, appears to have failed to learn lessons about risk from the financial crisis a decade ago, a lawmaker said on Wednesday, echoing criticism by regulators of his strategy.

The 3.7 billion pound ($4.7 billion) LF Woodford Equity Income Fund was frozen on June 3 because it could not meet redemption requests and has since said it will switch to investing in larger, listed companies.

Hundreds of thousands of small savers have money tied up in the fund, which analysts say could be frozen for months.

Neil Woodford's use of illiquid assets shows "he seems to have learnt little from the financial crisis," lawmaker Nicky Morgan, chair of parliament's Treasury Select Committee, told an Investment Association conference on Wednesday.

Andrew Bailey, chief executive of Britain's Financial Conduct Authority, said on Tuesday that Woodford had taken full advantage of flawed European Union laws in investing in unlisted or barely traded stocks, totalling a fifth of the fund's investments at the time of suspension.

"There will at the very least be a reassessment of rules around liquid assets and illiquid assets with respect to funds," said Julian Roberts, analyst at Jefferies, adding that it was possible that the fund could close.

In line with Bailey's testimony to the committee on Tuesday, Morgan told conference delegates that had a more flexible principles-based system been in place to regulate UK retail funds, Woodford's fund may not have pushed liquidity limits.

Morgan also said she would back tighter regulation of 'best buy lists' used by fund supermarkets such as Hargreaves Lansdown , which has 300,000 clients exposed to the suspended fund. It had the fund in its best buy list until the day of suspension.

STAKE SALES

Woodford is on the verge of appointing PJT Park Hill, a division of the investment bank PJT Partners Inc, to offload stakes in private companies such as Atom Bank and Oxford Nanopore, a source familiar with the matter told Reuters late on Tuesday.

The equity income fund only publishes its top 10 holdings but British biotech firm Oxford Nanopore was its 9th biggest holding at end-May, making up 3% of the portfolio. Hedge funds would be likely buyers of the fund's biotech assets, one industry source said.

Woodford has sold nearly 200 million pounds in the fund's UK listed assets to meet the fund's redemption requests, which include a demand from Kent County Council, in southern England, for the return of a 263 million pound investment by its pension fund. The fund suspension will be reviewed on July 1.

Woodford also had a 7% stake in WeBuyAnyCar owner BCA Marketplace, which received an offer for 1.91 billion pounds on Wednesday from private equity firm TDR Capital, boosting its shares.

Assets under management in Woodford's other open-ended fund, the income focus fund, have fallen below 300 million pounds, down 38% since June 3, according to Morningstar data. Hargreaves Lansdown and Fidelity International have cut investment in the fund, although it does not have unlisted assets.

Woodford's only listed fund, Woodford Patient Capital Trust , which has heavy investments in unlisted stocks, is trading near record lows but was up 0.15% at 0952 GMT. ($1 = 0.7890 pounds) (Writing by Sinead Cruise and Carolyn Cohn Editing by Keith Weir)