On the go: Investors trapped in Neil Woodford’s former flagship fund, including Kent County Council Superannuation Fund, could face a wait of up to one year for the rest of their cash.
In a letter published on Wednesday, the Woodford Equity Income fund’s administrator, Link Fund Solutions, told investors it was expected that some of the remaining assets would not be realised until “mid to late 2021”.
Link stated: “You are reminded that we have now sold the majority of the fund’s assets and it may take some time to sell those that remain.
“We will ensure that future sales of the fund’s remaining assets will be completed in a way that best protects your interests as an investor in the fund.”
Link said this meant it was unable to provide a specific date by which the fund’s wind-up would be complete and, in turn, all cash returned to investors.
It will continue to make capital distributions to investors as the fund’s assets are sold.
The liquid assets in the portfolio were largely sold in January this year, when £2.1bn — around 70 per cent of the portfolio — was returned to investors.
Investors have since received two further payments — of £143m and £183m, respectively — as more illiquid parts of the fund were sold. Some £288m is still trapped in the strategy.
The Kent County Council Superannuation Fund, with a total of £6.5bn in assets, still had £30m invested in the Woodford Equity Income fund at the end of June.
Woodford IM’s flagship fund had been struggling with outflows, which were running at a net £9m per working day in May 2019.
But in June, Kent County Council asked to withdraw all of the £250m it had invested with Woodford through its pension fund, and Kier Group — one of the strategy’s substantial holdings — announced a profit warning that prompted its shares to plummet by 40 per cent.
Mr Woodford’s representatives had played down fears about the fund’s liquidity, saying outflows had become moderate and that the manager remained as confident as ever his strategy would pay off.
But when Kent County Council’s request arrived, the fund did not have enough liquidity to meet the redemptions and was suspended.
Since then, Mr Woodford has been scrambling to sell shares to improve the fund’s liquidity in an effort to pre-empt a wave of redemptions when the strategy reopened.
But in October, it was announced that the suspended fund, initially touted to reopen in December, would be wound down and the former star manager was fired from the strategy.
This article originally appeared on ftadviser.com
