Interactive Investor

Woodford investors forced to wait until 2022 for rest of their money

3rd August 2021 09:33

Tom Bailey from interactive investor

Link said it was unable to provide an exact date for when investors will next receive a payment.

Beleaguered investors in the closed Woodford Equity Income fund will have to wait until at least 2022 to get the rest of their money back.

In an update to investors, Link Fund Solutions, which is managing the winding up of the fund, said that it is still in the process of selling down £123.6 million worth of assets in the fund.

Since it was announced that the fund would be wound up, investors have received £2.54 billion of capital via four distributions. The remaining £123.6 million should be returned to investors in the fifth distribution. This total amount may change depending on the sale of companies still in the fund’s portfolio.

However, Link said that it was unable to provide an exact date for when investors will next receive a payment. In the letter to investors, it noted that they “hoped that the sale of the remaining assets will be concluded in 2022”. However, it is “not possible to provide a definitive end date”.

Link said: “We appreciate that this continues to be a difficult time for investors and we would like to reassure you that we have taken all possible steps to act in investors’ best interests in returning cash to you at the earliest opportunity by not conducting a fire sale of assets.”

In total, the fund still has nine holdings. These are:

  1. Atom Bank
  2. Benevolent AI
  3. Cambridge Innovation Capital
  4. Mafic
  5. Nexeon
  6. RM2
  7. Rutherford Healthcare
  8. Sabina Estates
  9. BlackRock ICS Sterling Liquidity Fund (used to invest proceeds of sales prior to making a capital distribution)

The letter to investors also noted that the fund has had to invest further capital in some of the holdings to facilitate their later sale.

Link notes that around £1.5 million has been invested in Mafic since April last year to “simplify its corporate structure, to meet required cashflow and appoint an investment bank to progress the company to the next stage of its growth”. Another holding, Origin, has received £280,000. Link does not expect any further investments in the holdings.

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.

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.