Investors Locked in Woodford Fund Get First Check in January

(Bloomberg) --

Investors locked in Neil Woodford’s former flagship fund may receive their first payment as soon as Jan. 20 as assets are sold off to raise cash.

The fund, which will no longer bear Woodford’s name, has lost 18.6% since Woodford shocked the financial world by halting redemptions in early June, according to an investor letter on Friday from its administrator, Link Fund Solutions Ltd. The value of the fund stands at 2.95 billion pounds ($3.9 billion).

BlackRock Inc., hired to sell the fund’s holdings of publicly listed securities to prepare for liquidation, has so far brought in 1.65 billion pounds that has been reinvested in FTSE 100 stocks, money market funds, government securities and commercial paper, Link said. That represents 79% of the value of the listed assets it was instructed to sell, and finding buyers for the remainder may take longer, according to the statement. Link said it continues to seek buyers of the fund’s unlisted and thinly traded assets.

“While the initial liquid assets have been sold, now the hard work begins,” Ryan Hughes, head of active portfolios at investment platform AJ Bell, said in an emailed statement. “Link’s letter indicates that investors are likely to be waiting for some time before they get all their money back, as it appears that progress on selling the unlisted and highly illiquid assets has been very slow, with none sold so far and no date for when a sale is likely.”

The winding up of the renamed LF Equity Income Fund will begin on Jan. 18, after a final valuation the previous day. A series of payments will be made to investors in the coming months, according to Link’s statement.

The collapse of Woodford’s business empire was a remarkable reversal of fortune for a man who was known as one of the U.K.’s best stock pickers. He suspended redemptions in the flagship fund because he couldn’t sell his holdings quickly enough to meet redemption requests. In mid-October, he was ousted as manager of his flagship fund and announced he would shutter his investment firm.

Separately, Woodford’s former listed investment trust, now managed by a unit of Schroders Plc, has extended its credit facility for 12 months to Jan. 15, 2021, according to another statement. The Schroder U.K. Public Private Trust Plc, previously the Woodford Patient Capital Trust Plc, will work with Schroders to reduce the level of borrowings.

To contact the reporter on this story: Suzy Waite in London at swaite8@bloomberg.net

To contact the editors responsible for this story: Shelley Robinson at ssmith118@bloomberg.net, Patrick Henry, Lucca de Paoli

©2019 Bloomberg L.P.