LF Woodford Equity Income Fund to be wound-up

Posted by Adrian Lowcock in Fund and industry updates category on 15 Oct 19

Link Fund Solutions (LFS), the Authorised Corporate Director of the LF Woodford Equity Income fund has taken the decision to close the fund and to wind it up as soon as it is practicable. LFS intends to return cash to investors at the earliest opportunity.

Why has it decided to wind-up the fund?

It was the view of LFS that whilst progress has been made in repositioning the fund, it was not sufficient to provide clarity on when the restructuring would be fully achieved and therefore when the fund could be re-opened.

As such, LFS concluded that it was in the best interest of all investors for the fund to be wound up through an orderly realisation of the fund's assets which it feels will result in money being returned to investors more quickly than if it had remained suspended.

When will the wind-up start?

The wind-up will begin on 17th January 2020. This is the earliest date possible as there is a regulatory and legal requirement to give 3 months’ notice to investors.

When can I expect to get my money back?

Once the winding up of the fund begins on 17th January 2020 and the administrators have taken into account any liabilities that the fund owes and the costs incurred in the wind-up, they will begin the process of paying out the proceeds. This most likely means there will be a series of payments starting in early 2020.

How much can I expect to get back?

The fund will remain invested, but will be repositioned in anticipation of the wind-up so the value of the investments will continue to be subject to market movements. When the fund is wound up the administrators will get the best price possible and return money to investors after any costs. In the meantime LFS will continue to publish a daily price of the fund.

Who will manage the fund?

Woodford Investment Management Limited have immediately been removed as the investment manager of the fund. The portfolio will be split into two for administrative purposes only:

Portfolio A - Comprising of listed assets will be managed by BlackRock Advisors (UK) Limited.

Portfolio B - Comprising of the unlisted assets will continue to be administered by PJT Partners (UK) Limited who have been acting as a specialist broker during the suspension and who will continue in this role.

Will the fund name change?

As soon as it is practicable and once regulatory permission has been received, the name of the Fund will change from “LF Woodford Equity Income Fund” to “LF Equity Income Fund” to reflect the fact that Neil Woodford no longer manages the fund.

Whilst this is clearly disappointing news for investors in the fund it does allow the administrators to return capital as quickly as possible. We will keep you up to date on the situation as and when we get more information.