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Woodford investors to share £183m in third round of payments

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20/08/2020
Investors trapped in former star manager Neil Woodford’s Equity Income fund will receive a share of £183m as part of their third payment due next week.

In a letter to investors, the fund’s administrators Link Fund Solutions confirmed it is in a position to make a third capital distribution from the winding up of the fund.

As at 19 August, the fund has £183.15 million of cash available for distribution to investors.

This sum is made up of amounts received from Acacia Research Corporation for the sale of an agreed selection of healthcare assets, as well as the sale of assets since the second capital distribution.

The administrator confirmed a further letter will be sent to investors on 24 August detailing the amount they’ll receive as part of the third capital distribution.

This amount will be paid on or around 26 August, though for investors who traded the fund through a platform, they may not get the payment on the same day due to the time it takes for a provider to process the payment.

Link Fund Solutions said a total of £2.45bn will have been distributed to investors since the start of the fund being wound up.

The statement read: “It is intended that further capital distributions will be made as and when suitable amounts of cash have been raised from the sale of the remaining assets of the fund, including further proceeds received from Acacia.

“At this stage we are unable to advise you of the exact timing and amount of these future capital distributions as this is dependent upon the sale of the fund’s assets. Investors are reminded that the assets that remain to be sold are the less liquid assets of the fund and disposing of these assets may take some time.”

Link also provided an update on the publication of the fund’s annual accounts after previously advising this would be no later than 31 August 2020.

It said that while the audit is “progressing satisfactorily with all parties”, due to the significant amount of work involved in finalising the financial statements, Grant Thornton, the auditor of the fund is now expecting the annual accounts to be published by 30 September 2020 at the latest.

Investors will be contacted during September with further details.

‘Process will drag on for even longer for investors’

Laura Suter, personal finance analyst at investment platform AJ Bell, said there’s no sign of Link and the asset managers shifting the remaining illiquid assets in the fund.

She said: “There’s no mention of a timeline or any progress having been made on the sale of the assets, with Link just saying the sale ‘may take some time’. This means the process will drag on for even longer for investors, who just want to get as much of their money back as possible and move on from the sorry saga.

“It’s also frustrating that investors will have to wait even longer for the fund’s report and accounts for the year ending March 2020, with Link delaying their publication again from the end of this month to the end of September. This is another blow to investors who haven’t had access to a proper report and financial statements for the fund since the interim report for the six months ending 30 June 2019, well over a year ago. When they finally arrive the accounts will provide a bit more clarity to investors on the sale process and costs involved, but will now be over six months out of date by the time they are published.”

Details to date

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, Link confirmed the £3bn fund would be wound-up with cash returned to investors as soon as possible.

BlackRock was appointed to sell the liquid part of the assets while PJT Park Hill was tasked to sell the illiquid part of the portfolio.

In January, trapped investors received the first tranche of payments from the sale of assets. In March, investors received the second round of payments.

Neil Woodford, once considered Britain’s best stock picker, was sacked as manager of the fund and Woodford Investment Management was closed down.

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