Link Fund Solutions, the ACD of the suspended Woodford Equity Income fund, have informed us that the fund will be wound up and that Woodford Investment Management will cease to be the investment manager. Link Fund Solutions concluded that it was unlikely that the sale of unlisted and less liquid assets would be completed ahead of a planned re-opening in December and therefore an orderly wind up would be in the best interest of all investors.
Update 27/03/20 - Second payment
Following the first capital income payment (75.55%) from the fund in late January, we have received the second capital payment from the investment manager, Link Fund Solutions Limited (LFS), and have allocated it to investors, in line with their holdings in the suspended fund. Note that this second payment is much smaller than the first, being equivalent to 19.9% of the Fund’s remaining value as at 10 March 2020. We will be writing to you and your clients shorlty.
Why was the fund suspended originally?
The fund was suspended on the 3 June 2019 due to an increased level of withdrawals from the fund by investors. The suspension was intended to protect investors who wished to remain in the fund by allowing Woodford time to reposition the element of the fund’s portfolio invested in unquoted and less liquid stocks and shares, in to more liquid investments that would be easier to trade.
What does it mean for investors?
The winding up will commence on 17 January 2020 and means that investors remain unable to send us buy or sell instructions for the fund, instead receiving money back into their account as the underlying assets are gradually sold in 2 portfolios (one of liquid assets and the other illiquid assets). The price of the fund will continue to be dependent on the value of the underlying assets.
Link is planning to return cash to investors at the earliest opportunity, and has appointed BlackRock Advisors (UK) Limited and specialist broker Park Hill to help sell the assets. The first payment to investors is anticipated by the end of January 2020. As the fund is now closed, the money will be returned to investors in instalments as the assets are sold off.
What happens next?
We are in communication with Link Fund Solutions and we will communicate further with you and investors once we have further information from Link Fund Solutions explaining in more detail what the wind up will mean for your clients’ investments. This will include updating the Q&A’s below.
The Questions and Answers below also provide details of what you can and can’t do if you are invested in the fund.