Investors in the flagship fund of former star manager Neil Woodford are facing a further delay in the sale of its remaining assets after fund administrator Link continues to struggle winding up the fund.
Having last summer pushed back the final sales of the Woodford Equity Income fund’s assets until some time in 2022, and confirmed the same in late November, but investors were today told that this “may not be completed by the end of 2022”.
Link Fund Solutions, which suspended the fund in June 2019, began the process to finally wind up the fund in January 2020.
Ryan Hughes, head of investment research at AJ Bell, said the news “will be extremely disappointing for investors locked in the fund” and that “it seems that little progress has been made on disposing the remaining assets in the fund since Link’s last update”.
Moira O’Neill, head of personal finance at Interactive Investor, said the letter is “guaranteed to add insult to injury after almost three long years. It adds more questions when all people want is answers. There’s no specific date for the fifth capital distribution and no guarantee that a wind up of the fund will happen in 2022.”
Link, which has been taken to court by law firm Leigh Day to claim losses suffered by investors in the fund, sent a letter to investors that revealed the value of the fund’s remaining assets was £140.9mln at the end of February 2022.
While this represented an improvement from the £124.3mln in November, it compares to £288mln a year ago.
The current assets comprise nine shareholdings to be sold: Atom Bank, Benevolent AI, Drayson, Mafic, Nexeon, Origin, RM2 (LSE:RN2), Rutherford Healthcare and Sabina Estates.
The main change from the last update is that Cambridge Innovation Capital is no longer listed in the assets to be sold.
Hughes said while investors may be heartened to see that the value of the assets has actually increased since the last update, “this will be of little comfort given the longer term performance”.
“Investors will be more focused on when they can finally get the remainder of their money back and there is no commitment in the latest update on this front.
“It’s been 15 months since investors had their last distribution which shows just how challenging it is to try and sell the remaining assets into a market where the buyers hold all the cards.
“While Link will be trying to ensure they get the best possible price for the assets, it’s also important to balance the length of time investors are having to wait. I suspect many would now simply accept a lower price to get the sale completed so they can draw a line under this sorry saga and move on.”
Investors are also waiting to hear from the Financial Conduct Authority, which in January said it was close to making a decision on whether to take enforcement action over Link's gating of the fund in 2019, with chief executive Nikhil Rathi saying the watchdog was "finalising our legal analysis with a view to making decisions as to whether to take action and, if so, what action should be taken and against whom".
There has been no update since.
“The FCA must provide some answers soon," said O'Neill, “because investors need closure of some kind. We were expecting news from the regulator by the end of 2021 but the deafening silence has continued well into 2022.”