Investment manager Neil Woodford has been removed from running his now-infamous £3.5 billion equity income fund – four months after the fund was first suspended pending illiquidity problems.
As we reported in June, the fund was suspended following a poor run of investments and a bandwagon of investors wanting to pull out of the fund. A lack of liquidity meant that the Woodford Equity Income Fund couldn’t meet demand to liquidate, forcing their hand and suspending withdrawals from the fund.
Despite Woodford’s desire to re-open the fund, administrators Link Fund Solutions has ruled that the fund should now be wound up, and all remaining investments returned to their owners.
In a quote on the Woodford Funds website, Neil Woodford says: “This was Link’s decision and one I cannot accept, nor believe is in the long-term interests of LF Woodford Equity Income Fund investors.”
Despite the news investors will still be concerned, with LFS vaguely stating that their money will be returned at the “earliest opportunity”. The expected date for the winding-up process to begin is January 17, 2020 – seven and a half months after the fund was initially suspended – with funds to be returned starting at the end of January.
That will still leave some investors waiting for their cash back even longer, and worse still is exactly how much of their investment they will receive. The Financial Conduct Authority are still investigating the Woodford Equity Income Fund (WEIF) and, according to their press statement, “The amount you will receive will depend on the fund’s value and the amount raised by selling the fund’s assets.”
Pressure is now building on other funds established by Neil Woodford including the Woodford Patient Capital Trust, with analysts and disgruntled investors calling on the WPCT board to dismiss Woodford from his role in that trust as well. The share value of the WEIF is reportedly down by -27.67% year on year as of yesterday, with the WPCT reporting a share price drop of 7.3% following the news of Woodford’s equity fund closing down.
Blackrock and PJT Partners will now begin to sell off the liquid and illiquid companies that have been backed by the Woodford Equity Income Fund.
You can read the full Link Fund Solutions wind-up notice by visiting the URL below: