In an update to investors, the fund’s administrators Link Fund Solutions admitted that selling the fund’s assets may not be complete by the end of 2022 as it had hoped.

The Woodford Equity Income Fund is now known as the LF Equity Income fund. The letter from Link managing director Karl Midl said that “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.”

The Woodford Equity Income fund was suspended in June 2019 following an increase in redemption requests which couldn’t be readily met. In October 2019, the fund’s administrator Link Fund Solutions confirmed the £3bn fund would be wound-up with cash returned to investors as soon as possible.

The fund managed about £10bn in assets at its peak. It is now in the process of being wound down and its assets are being sold off – if this isn’t complete this year it will take the delay for investors waiting to get their money back into a third year.

The letter from Midl also informed investors the publication of the fund’s NAV (net asset value) would shift from monthly to quarterly, with effect from 30 June 2022.

To date Link has made four capital distributions to investors which amount to a total of £2.54bn from the sale of the fund’s assets. As of 28 February 2022, the value of the fund’s remaining assets stood at £140.93m and comprises shareholdings in Atom Bank, Benevolent AI, Drayson, Mafic, Nexeon, Origin, RM2, Rutherford Healthcare and Sabina Estates.

Link reminded investors that “due to the nature, and maturity of some of the fund’s remaining assets, their valuation can materially change and it is possible that their valuations may fall as well as rise”.

A fall in the value of one or more of the remaining assets will adversely affect the NAV of the fund and, therefore, were this to happen the amount to be distributed to investors would be lower than the fund’s current valuation.

The letter said Link was unable to provide a specific date for the fifth capital distribution or for the completion of the winding up of the fund, and warned investors that the process might not be completed this year.

Ryan Hughes head of investment research at AJ Bell, said: “This will be extremely disappointing for investors locked in the fund. It seems that little progress has been made on disposing the remaining assets in the fund since Link’s last update just over three months ago.

“It’s interesting that Cambridge Innovation Capital is no longer listed in the assets to be sold which leaves nine positions remaining. Investors may be heartened to see that the value of those assets has actually increased since the last update with a 13% pick up in the value stated by Link since the end of February, which compares favourably to the performance of the FTSE All Share index but this will be of little comfort given the longer term performance.

“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.”

Moira O’Neill, head of personal finance at Interactive Investor, said: “Today’s letter is guaranteed to add insult to injury after almost three long years. It adds more questions when all people want is answers. There’s no specific date for the fifth capital distribution and no guarantee that a wind up of the fund will happen in 2022.

“Excruciatingly, there was no acknowledgement of investors’ pain in the letter. This is people’s hopes and dreams for retirement dashed, and we’d like to see more understanding of this.

“The FCA must provide some answers soon, because investors need closure of some kind. We were expecting news from the regulator by the end of 2021 but the deafening silence has continued well into 2022.”