Neil Woodford investors to receive fourth payment
We explain how much cash will be distributed to investors and when the payments will be made.
4th December 2020 10:35
by Kyle Caldwell from interactive investor
Share on
We explain how much cash from the fund will be distributed to investors and when payments will be made.
Investors in the LF Equity Income fund, formally named the LF Woodford Equity Income fund and managed by Neil Woodford, will share a payment of nearly £100 million in mid-December.
In a letter published this week, the fund’s administrator Link Fund Solutions said £98 million had been raised in the latest sell-off of the portfolio’s assets. Individual payments will be made on or around 11 December, but may take a couple of days longer for those who invested in the fund through platforms.
Investors will receive a further letter on or around 9 December, which will confirm the total that will be distributed and the amount they will receive in this fourth payment.
- Invest with ii: Accumulation or Income Funds | Top Investment Funds | Open a Trading Account
Further payments are expected, but Link is keeping its cards close to its chest regarding timings. It has cautioned that some of the unquoted shares held in the fund, due to their illiquid nature, will not be sold until mid to late 2021.
- Ian Cowie: how 15 trusts I own have fared since Covid-19 sell-off
- Fund liquidity concerns resurface after limit breaches
- Jeff Prestridge: will investment teams usurp star fund managers?
Link told investors: “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. 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.”
The letter added “we will continue to write to you to keep you informed throughout the winding-up process in relation to future capital distributions and other developments, including a possible fifth distribution”.
How much money has been returned to investors?
In August, when £183 million of assets were returned, investors were informed that a total of £2.45 billion had been paid back. The fund’s value when it was shut stood at around £3 billion.
Investors received more than 75% of the assets from payouts made in January and March 2020.
The first payment to investors, which was made at the end of January, was £2.1 billion, which is equivalent to around three-quarters of the fund’s assets.
- Funds Fan: favourite investments and Peter Spiller on trust discounts and gold
- Take control of your retirement planning with our award-winning, low-cost Self-Invested Personal Pension (SIPP)
In March, another payment was made, with investors receiving 3.1p to 3.9p per share, depending on the share class. This second sell-off raised £143 million.
Investors were suspended from withdrawing their holdings in Woodford’s Equity Income fund in June 2019 due to the fund being unable to sell its illiquid assets to meet a heavy flow of redemptions.
The suspension eventually led Link to announce in October that it would liquidate the fund, resulting in Woodford Investment Management closing.
Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.
These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.
Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.