The Woodford Equity Income Fund has lost £31.2mn after one of its holdings suffered a 51 per cent fall in value.
In an update to shareholders today, the fund’s authorised corporate director (ACD) said the fund’s AUM had been adversely impacted by Benevolent AI’s share price dropping from €8 (£7.01) per share to €3.91 (£3.42) per share.
The company is listed on the Euronext exchange and is involved in the creation and application of artificial intelligence and machine learning to improve the way medicines are discovered and developed.
The fund’s value has fallen from £118.6mn on June 15 to £79.9mn on September 30 this year. No investor payouts have been made in that time.
Between May and June this year, the fund lost £24mn after another of its holdings, Rutherford Health, appointed an official receiver.
The fund now has exposure to Atom Bank, Benevolent AI, Freevolt, Mafic, Nexeon, Origin, RM2 and Rutherford.
The ACD, Link Fund Solutions, said because the fund now holds relatively few assets, and because some of the shareholdings (such as Benevolent AI) have a relatively large weighting compared to others, a change in the value of such assets will lead to a "disproportionately large percentage increase or decrease" in the fund's net asset value.
A payment of £20mn will be made to investors in a capital distribution, with the final amount confirmed in November.
Managing director at Link Fund Solutions, Karl Midl, said some of the assets in the fund may not be sold before mid-2023.
Claim against Link
This summer, two law firms joined forces in a claim against Link Fund Solutions over the company’s handling of the Woodford Equity Income fund.
Leigh Day and Harcus Parker submitted a group litigation order at the High Court on June 15 on behalf of more than 3,000 investors in the fund, which collapsed in 2019.
The firms believe the claim will be worth more than £100mn.
Both companies had previously begun court proceedings against the fund’s authorised corporate director - Leigh Day in September last year and Harcus Parker last month.
