Investors in Neil Woodford's former flagship fund will receive up to £235mln of redress from the fund's corporate director Link Fund Solutions (LFS), the UK financial watchdog has ruled today.
The announced compensation payment from the Financial Conduct Authority is less than the £306mln determined in its initial assessment last September.
An investigation found LFS, which is owned by Australia's Link Group, made "critical mistakes and errors" in managing the Woodford fund's liquidity that resulted in the fund failing to have enough liquidity from September 2018.
Following a rush of investor withdrawals from the fund, it was gated by Link in 2019.
As well as needing the approval of investors entitled to redress, the payment is subject to parent Link Group completing the sale of the LFS business to Dublin-based Waystone Group, which has today been agreed for between £110-140mln on a debt- and cash-free basis.
The FCA said the payment was reduced from £306mln as this was "substantially greater than the remaining assets" of LFS, which has a net balance of cash and capital resources of £47mln and holds relevant insurance cover of up to £48mln.