The administrator of the Woodford Income Focus fund has said it does not believe the fund should be shut down, although this could not be ruled out.
Link Fund Solutions, which is the authorised corporate director of the £250m fund, said appointing a new manager or merging it with an existing fund were the options that would "provide the benefits of continuity and certainty for investors".
Until now the company had been considering whether to close the fund and return cash to its investors, or to allow it to continue in some form - either by merging it or appointing a new manager.
Woodford Income Focus has been suspended since October, when Neil Woodford announced he would be closing his eponymous fund house after Link decided it would shut its flagship Equity Income fund.
In a letter to investors today (November 13), Link said it had met with several shortlisted fund managers which had expressed an interest in taking over the fund from Woodford Investment Management and said it was now focused on securing a merger or the appointment of a new manager.
It is understood BlackRock and Schroders have both pitched to take over the fund.
But Karl Midl, a director at Link Fund Solutions, said the fund's closure was still possible if neither of these solutions turned out to be the best option.
He said: "We will continue to explore these options further and expect to be able to confirm which of them we believe is in the best interests of investors in the next 21 days.
"However, if, we determine that neither of those options is in the best interests of investors then we will write to you at the earliest opportunity to explain why we reached that decision.
"In that scenario we expect that the likeliest outcome will be that we will make an application to the Financial Conduct Authority for approval to wind-up the fund through a process of an orderly realisation of the fund’s assets."
Link also confirmed the fund's suspension would continue, since it remained "in the best interests of all investors".
The company also revealed the Income Focus fund had lost 0.33 per cent since the suspension was enacted - underperforming its benchmark, the FTSE All-Share Total Return index, which gained 2.12 per cent.
Over the same time period the fund's sector, the IA UK Equity Income, has gained 2.68 per cent.
The fund, which was set up in 2017, is the worst performer in its sector over one year, six months and three months, losing 27.5 per cent since inception while its sector gained 7.3 per cent.
Woodford Income Focus holds none of the illiquid or unquoted investments that have blighted the Woodford Equity Income fund, which was suspended and eventually closed because of poor performance and a large level of redemptions.