Neil Woodford's flagship fund has suspended trading as the manager attempts to deal with a surge in redemptions from investors.
After a month in which the Woodford Equity Income fund slumped by a further 9 per cent, Link Fund Solutions, the authorised corporate director for the strategy, said: "We have, in conjunction with Woodford Investment Management [...] come to the conclusion it is in the best interests of all investors in the fund to suspend the issue, cancellation, sale, redemption and transfer of shares in the fund".
"Following an increased level of redemptions, this period of suspension is intended to protect the investors in the fund by allowing Woodford, as previously communicated to investors, time to reposition the element of the fund’s portfolio invested in unquoted and less liquid stocks, in to more liquid investments."
Mr Woodford's unlisted investments have become the focus of particular scrutiny from investors. The asset manager has been battling to ensure its income fund's unquoted holdings remain below the maximum permitted level of 10 per cent of assets.
Woodford IM transferred £72m of unquoted assets from the income fund to its Patient Capital trust in March, and said at the start of May that it ultimately intended to reduce the flagship strategy's exposure to zero. Investors have continued to withdraw money from the fund in the meantime, with recent redemptions extending well above the £100m a month mark.
On the performance front, the fund has now lost 18 per cent over the past year, compared with an average rise of 23.6 per cent for peers.
It is not yet known how long the suspension will last. Woodford IM said it would keep investors "appropriately informed about the suspension, including its likely duration".