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BlackRock and Schroders poised to win Woodford's second fund

BlackRock and Schroders poised to win Woodford's second fund

The battle to take over Neil Woodford’s suspended Income Focus fund is a two horse race between Schroders and BlackRock, it has been reported.

According to the Daily Telegraph, the two giant fundhouses are both well positioned to take the reins over the £250m Income Focus fund, following the looming closure of Woodford Investment Management.

Both asset managers already manage assets previously run by Neil Woodford. Schroders is set to manage the Woodford Patient Capital Trust from December — which it will rename the Schroders UK Public Private Trust — while BlackRock is currently involved in winding down Mr Woodford’s Equity Income fund.

Just last week the administrators of the Woodford Income Focus fund, Link, said they expected to make a decision on its future “within weeks”.

Link told investors there were three options for the fund — appointing a different manager, merging the fund with another, or liquidating the fund and returning cash to investors.

The company said it had received “expressions of interest” from several companies wanting to take on the Income Focus mandate and had retained the services of an investment research firm to assess the options. 

The Income Focus fund has lost 20 per cent over the past year, compared with a gain of 6 per cent for the average fund in the IA UK Equity Income sector in the same time period. This makes the fund the worst performer in its sector over that time period.

But the recent revival in the performance of value stocks has meant that since the suspension, the fund has performed better than the UK market, returning 1.3 per cent, compared with 1.1 per cent for the FTSE All share in the same time period. 

The fund holds none of the illiquid or unquoted investments that have blighted the Equity Income fund.

imogen.tew@ft.com

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