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Woodford forgoes salary while fund is suspended

Woodford forgoes salary while fund is suspended

Neil Woodford has agreed not to take a salary or any other income from Woodford Investment Management while his flagship fund is suspended.

The Woodford Equity Income fund was suspended on June 3 amid a wave of redemptions and following a period of stark underperformance.

The fund management company continues to get management fees from investors in the stricken fund, though Mr Woodford does not personally benefit.  

An announcement to the stock exchange this morning (29 July) from the Woodford Patient trust revealed Mr Woodford has sold about 60 per cent of his investment in the trust, and got £1m for this holding.

A representative of Woodford Investment Management said: "Following the suspension of the Woodford Equity Income Fund, Mr Woodford elected not to take any income or dividends from Woodford Investment Management Limited whilst the Woodford Equity Income Fund remained suspended.

"In the circumstances, whilst a reluctant seller, between 3 and 8 July Mr Woodford sold 1.75m of his WPCT shares (around 60 per cent of his holding).

"The sole reason that he did so was in order to meet personal financial obligations, including a tax liability."

Mr Woodford has always declined to reveal how much of his personal wealth is invested in the products he manages, except to state that apart from his houses, he has no other investments than in his own funds and fund management company.

However, information for the listed fund shows he retains a holding of 1.2m shares in the trust, which equates to a holding of 0.14 per cent.

Under the fee structure of the trust, Mr Woodford receives no management fee, only a performance fee, and since the trust was launched, the performance target has not been met, so no fee has been paid. 

The shares have fallen in value from 78p to 53p over the past year. 

david.thorpe@ft.com