Woodford Equity Income Fund may not be wound-up until next year

Investors in the former Woodford Equity Income fund were dealt another blow today after being told that the vehicle may not be completely wound-up until next year.

Link Fund Solutions, the company responsible for managing the fund’s remaining assets, has written a letter to investors warning that it could not provide a date by which it will have closed the fund or made the next capital distribution.

It stated that it had managed to sell off the majority of the fund’s assets but wanted to offload the remainder and hand out cash to shareholders at a speed that would provide the greatest benefit for investors.

Collapse: Neil Woodford (pictured) saw his reputation reduced to tatters after trading at his investment business suffered a run of poor investments and under-performance

The letter, written by Link’s managing director Karl Midl, added that it would further inform investors on the progress of asset sales, either when it can make a fifth capital distribution or sometime around the end of July.

‘Due to the nature of the fund’s remaining assets and our commitment to achieving the best outcome for investors, it is possible that the wind up of the fund may not be completed by the end of 2022,’ Midl said.

Trading was suspended in summer 2019 following a run of under-performance and a subsequent liquidity crisis, before the fund’s closure was announced in October of that year, leaving the reputation of its high-profile manager Neil Woodford in tatters.

During the time he was running his investment management business, Mr Woodford and chief executive Craig Newman earned tens of millions of pounds in dividends, including £13.8million in the firm’s last full financial year.

It marked a dramatic departure for Woodford, who had enjoyed a stellar 25-year long career at Invesco Perpetual, where he was considered by many in the financial sector to be one of Britain’s best fund managers.   

Many investors had withdrawn their money from Woodford’s fund in the run-up to its collapse, but after trading was suspended hundreds of thousands of customers who had not pulled out were left without access their funds. 

Ryan Hughes, the head of investment research at AJ Bell, said: ‘Investors will be more focused on when they can finally get the remainder of their money back and there is no commitment in the latest update on this front. 

‘It’s been 15 months since investors had their last distribution which shows just how challenging it is to try and sell the remaining assets into a market where the buyers hold all the cards. 

‘While Link will be trying to ensure they get the best possible price for the assets, it’s also important to balance the length of time investors are having to wait.

‘I suspect many would now simply accept a lower price to get the sale completed so they can draw a line under this sorry saga and move on, not least as we are now close to three years since the fund suspended.’ 

This post first appeared on Dailymail.co.uk