Investors in the collapsed Woodford Equity Income fund may have to wait another year before they get the last dribs and drabs of cash back.
Fund administrator Link Fund Solutions warned that it expected to still be selling the final investments held in the fund, now called the LF Equity Income Fund, in “mid to late 2021”.
This means it could be more than two years after the fund was suspended, June last year, before all the money is returned.
Some £15.5mln of fees have been paid by Link out of the fund’s assets to BlackRock, Park Hill and lawyer Debevoise & Plimpton to enable the asset sales, according to accounts published this week.
Of this total, BlackRock was paid £11mln to dispose of the easy-to-sell Portfolio A assets, Park Hill £3.2mln for its efforts selling the unquoted and less liquid quoted stocks, and New York firm Debevoise & Plimpton £2.5mln as the illiquid sales “required specialist legal support”, but Link waived £1.2mln of its fees.
Some £2.5bn has been returned to investors in three payouts so far.
The remaining fund was now valued at £288mln, Link revealed, after losses of £875mln since the fund was suspended due to writedowns of the fund’s unquoted holdings, much of which with the cut-price £224mln sale of 19 life sciences holdings to US investor Acacia Research.
There are roughly £92m of assets still awaiting transfer to Acacia, which Link said it aimed to have completed by the end of November and enable a fourth distribution to investors soon after.
Ryan Hughes, head of active portfolios at AJ Bell, said: “The latest update from Link does little to ease the pain for embattled investors stuck in the Woodford Equity Income fund.”
A near two-year wait was still dependent on Link being able to offload the remaining £288m left in the fund, he said, “which may be challenging given market conditions are being severely impacted by coronavirus”.
He said the £15.5m in fees “will surely stick in the throat of all investors who have been waiting patiently to get some of their money back”.
"While these fees would have been due regardless of who was selling the assets, seeing such sums will make for painful reading for investors.”.”