Wednesday 30 September 2020 4:05 pm

Investors stuck in Woodford fund face further repayment delays

Investors stuck in Neil Woodford’s collapsed flagship fund have been dealt a further blow as administrator Link was today unable to reveal when the wind-up will be completed.

Today Link warned that some of the remaining assets, which are currently worth £288m, will not be released until mid to late next year. So far £2.45bn has been returned to investors since the fund was suspended in June last year.

Read more: Shuttered Woodford fund to pay out £183m to investors next week

“This means that we are unable at this time to provide a specific date by which the fund’s wind up will be complete and all cash returned to investors,” Link said in a letter to investors. 

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 with the news that the winding up of the fund could still be happening in another 12 months, meaning that over two years would have passed since the fund originally suspended.  

“This is of course dependent on Link being able to offload the remaining £288m that they have confirmed is left in the fund which may be challenging given market conditions are being severely impacted by coronavirus.”

The letter also revealed that investors will have to pay a £15.5m fee to BlackRock, Park Hill and lawyer Debevoise & Plimpton.

“While these fees would have been due regardless of who was selling the assets, seeing such sums will make for painful reading for investors,” Hughes added.

Last June the fund was suspended after becoming overwhelmed by investor withdrawal requests, leading to the investment industry’s biggest crisis in years.  The suspension eventually led to Woodford shuttering the business in October.

Read more: FCA launches probe into Woodford depositary Northern Trust

Link Fund Solutions, which has been responsible for overseeing the suspension and liquidation of Woodford’s fund, announced in October it would sack Woodford, wind up the fund and help investors recover some of their losses.

Payouts started in January with £2.1bn being returned to investors with fees and costs of $43m also being paid out. Another payment of £143m was made in March.