Woodford Fund Repayments Start in January

Just over half of Woodford Equity Income has been liquidated by BlackRock, and investors will get some of their money back on January 20

Holly Black 13 December, 2019 | 2:58PM

Neil Woodford

Investors stuck in the Woodford Equity Income fund have been given some clarity on when they can expect to get their money back.

Investors will find out on January 13 how much of their money they will get back. Link Asset Services, the authorised corporate director (ACD) for the fund, has told investors they will some of their money back on or around January 20, 2020.

Investors have been unable to access their money since the fund suspended trading in June. In October, the decision was taken to close the fund for good and BlackRock was tasked with selling the assets in the more liquid side of the portfolio.

Link has now confirmed that the winding up of the fund will take place on January 18. At this point, the portfolio will be valued and a first distribution made to investors based on the number of units they hold.

Investors Braced for Losses

BlackRock has now sold assets to the value of £1.65 billion. It is estimated just over half of the portfolio has been liquidated and Ryan Hughes, head of active portfolios at AJ Bell, says that values the entire fund at around £2.95 billion – it’s a far cry from the £10.2 billion the fund was once worth and means investors should be braced to get back far less than they originally put in.

Link said this money had been re-invested in “FTSE 100 index instruments, money market funds, government securities and commercial paper with short maturity dates”. It means that investors will still have some exposure to the stock market while the winding down of the portfolio is carried out.

Hughes said: “Investors can take some solace in the fact that some of the assets have been reinvested back into FTSE trackers, so they will have benefited from some of the post-election bounce the index has seen so far today, but this is likely to be consolation.”

Indeed, Link says the fund is down 18.6% since it gated. The FTSE All Share has delivered a return of 4.1% over the same period.

Adrian Lowcock, head of personal investing at Willis Owen, points out that it also means investors have effectively been paying an active management fee for passive management.

What is less clear is when the less liquid assets in the portfolio will be sold. Park Hill has been tasked with selling the investments, and Link said it was currently unable to confirm when these assets will be sold.

Hughes said: “While the initial liquid assets have been sold, now the hard work begins. Link’s letter indicates that investors are likely to be waiting for some time before they get all their money back as it appears that progress on selling the unlisted and highly illiquid assets has been very slow, with none sold so far and no date for when a sale is likely.”

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About Author

Holly Black  is Senior Editor, Morningstar.co.uk

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