It is decision time for those investors who lost money as a result of the meltdown of investment fund Woodford Equity Income, managed by Neil Woodford – once king of the retail investment jungle.
The fund closed its doors in 2019 after a big institutional client couldn’t get its hands on the money it had invested.
It marked the beginning of the end for the fund, stuffed full of illiquid investments that should never have been held in a vehicle badged equity income.
Counting the cost: Neil Woodford’s investors were left massively out of pocket
It also curtailed Woodford’s career, leaving him to enjoy the exotic fruits earned at the expense of his investors, while Link – the business employed to look after the best interests of fund investors – came under intense regulatory scrutiny for failing in its duties.
The decision that investors (at the time the fund was suspended) must make in the next couple of weeks is whether to accept the redress on offer as a result of a deal struck between the City regulator and Link – or reject it.
On the plus side, the redress – a minimum of £180million – represents money on the table, although it wouldn’t be received by investors until the middle of next year.
On the minus side, it’s not generous, nor fair – an array of experts say redress should be nearer £1billion.
For the redress scheme to be voted through, it requires at least 50 per cent of voters to approve it by number and 75 per cent by value.
If this happens, it will stop class actions launched by various law firms against Link – and maybe those against other connected parties, such as investment platform Hargreaves Lansdown, which promoted the Woodford fund until the day dealings in its shares were suspended.
I am not a Woodford fund investor, so I don’t have skin in the game.
But it seems the Financial Conduct Authority is more intent on bringing this sorry saga to an end rather than ensuring financial justice is delivered.
As one Woodford investor told me rather forcefully: ‘The redress scheme appears to be a settlement on the cheap.’
The vote could be a close one.
Meanwhile, jungle VIP Neil Woodford, above, has yet to be held accountable by the regulator.
On all accounts, he continues to enjoy the good life. Yes, life isn’t always fair.
