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Closure of the Woodford Equity Income Fund

You will no doubt be aware that the decision has now been taken not to re-open the Woodford Equity Income Fund, following its suspension in June.

The decision not to re-open, but instead to wind up the fund, has been made once again by Link Fund Solutions (LF), the Authorised Corporate Director of the fund. LF are an independent company who act in the interests of the fund unit holders in accordance with the Financial Conduct Authority’s regulations.

LF has been considering the future of the fund since its suspension and its assessment now is that its closure is in the best interests of all investors. We agree with this view but appreciate this could be disappointing news to some investors as money may not be returned as swiftly as might have been expected, had the fund reopened in December.

The wind up does allow more time to be taken to liquidate the unlisted stock so should prevent a fire sale (the forced sale of goods at prices below perceived value). We hope that the bulk of your investment will be returned by the end of January 2020.  With the expectation of further payments being received throughout 2020 as and when the more illiquid unlisted stocks are sold.

The wind up also prevents a further suspension of the fund, which may have been possible had the majority of investors sought to remove their funds if the existing suspension was lifted.

The funds released on wind up will be credited to the existing investment as cash and will be invested into the other funds held by your portfolio at the next rebalance date, or paid out if an existing instruction is in place.

As previously noted, the decision to suspend dealings was taken to protect all investors in the fund following an increased level of redemptions. Having continued to consider the future of the fund during its suspension, LF had hoped that the fund would have been repositioned into more liquid assets by early December. However, while progress has been made, this has been insufficient to allow reasonable certainty that the repositioning would be achieved in time to allow the fund to be re-opened. Orderly realisation of the fund’s assets will allow money to be returned more quickly to investors than if the fund had remained suspended for a longer period of time.

Repositioning of the fund’s assets will continue but the focus will now be on preparing the fund to be wound up.

We have placed a link below to the letter from Link Fund Solutions regarding their announcement to close the fund.

Please do get in touch with us if you have any questions or concerns.

Ben Silk
Investment Committee Chair

 

  • Letter from Link Asset Services

    Investor letter regarding the winding up of the Woodford Equity Income fund.

    Download