Fallout: Neil Woodford
The business that supervised Neil Woodford’s management of his doomed flagship fund has been put up for sale.
Link Fund Solutions (LFS) is being touted to buyers by Australian parent company Link Group, as the fallout from the Woodford debacle continues.
Link Group’s decision to rid itself of LFS comes as the British unit faces fines, lawsuits and redress payments over allegations it failed Woodford investors. The parent company has appointed investment bankers at Macquarie Capital and UBS as advisers.
The Financial Conduct Authority (FCA) revealed last month that it was preparing to fine LFS £50m, and would order it to pay up to £306m of redress to Woodford customers.
This scuppered Link Group’s hopes of selling itself to Canadian software and technology group, Dye & Durham (D&D), in a deal which would have valued it at £1.4bn. Link Group is in talks to sell its corporate markets and banking and credit management units to D&D, for around £700m.
But by selling the toxic LFS business, Link Group may be hoping it can revive the earlier, more generous offer for the whole company.
Three years have passed since Link shuttered the Woodford Equity Income Fund (WEIF), freezing £3.7billion of savers’ money inside, following a run of poor performance from the manager.
But the ripples from the implosion of Woodford’s empire continue to spread across the funds industry.
Hargreaves Lansdown, the investment platform which recommended WEIF to savers, revealed this week that its chief executive Chris Hill was stepping down as it too faces a lawsuit from angry Woodford investors. Hargreaves Lansdown’s co-founder, 76-year-old Peter Hargreaves, blasted its chairman Deanna Oppenheimer yesterday as he slammed the ‘diabolical’ performance on her watch.
WEIF has since been wound up and its assets sold, though some of the harder-to-sell stocks remain locked inside.
Investors have lost around £1billion during the process.
LFS is being sued by investors for failing to keep a closer eye on Woodford as he invested increasing amounts of their money in risky and hard-to-sell stocks.
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