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Woodford investors see fees cut as new managers confirmed

Woodford investors see fees cut as new managers confirmed

Investors trapped in the Woodford Income Focus fund are set to see a fee cut of about 0.5 per cent as it has been confirmed Aberdeen Standard will take over the management of the suspended portfolio.

In a letter to investors published today (December 20) the fund’s administrators Link Fund Solutions announced Standard Life Investments, part of Aberdeen Standard, had been appointed to manage the fund.

Link, Aberdeen Standard and the fund’s depository Northern Trust have all agreed to waive their fees for their various roles until May 31 next year. According to Link, the combined total of fees being waived will result in the equivalent of a 0.5 per cent being cut from investor fees.

After this there will be no change to the charges paid by investors, however there will be portfolio transaction costs incurred as a result of selling and buying assets to re-position the fund, Link stated.

In the letter Link stated Aberdeen Standard had been appointed as the firm was “best placed” to seek to add value to investors and that the fund house confirmed it would “employ its significant investment resources” to manage the fund for the long-term benefit of existing investors.

Aberdeen Standard will be appointed from December 31 this year. The £267.6m fund is to be managed by Charles Luke and Thomas Moore, supported by the UK equity team led by Andrew Millington. 

The fund will remain suspended while the new managers reposition the fund’s investments but Link expects to be able to re-open the portfolio no later than February 2020.

As soon as possible the name of the fund will be changed from LF Woodford Income Focus fund to LF ASI Income Focus fund.

The Woodford Income Focus fund was suspended in October this year after former-star fund manager Neil Woodford resigned as manager.

His investment company Woodford Investment Management is currently in the process of being wound down.

Since the fund's suspension the portfolio has returned 5.63 per cent against a FTSE All Share benchmark of 5.67 per cent.

Kristy Barr, UK distribution director at Aberdeen Standard Investments, said: “As the UK’s largest active asset manager we have a very strong focus on our UK equity franchise and this income strategy is a fantastic enhancement to our offering. 

“The excellent long-term track records of Mr Luke and Mr Moore as well as the robustness of our research and risk processes gives us the confidence that we can deliver the expected investment outcome for the existing shareholders as well as others looking for long-term income and capital growth.”

imogen.tew@ft.com

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