Investors trapped in Neil Woodford’s flagship Equity Income fund will receive about 50p per share on the majority of their investment, the fund’s administrators have revealed.
In a letter sent today (January 28) Link Fund Solutions told investors they would receive between 46.3p and 58.9p per share, depending on who was involved in the fund’s distribution and whether the investor was in accumulation or receiving an income on their investment.
On average, investors in accumulation will receive 55.62p per share while those who have received an income are getting back 47.62p per share.
The share class receiving the highest return is the Z share class, which represents investors who used consumer platform Hargreaves Lansdown. Hargreaves investors in accumulation and receiving income will get 58.9p and 48.4p per share respectively.
Hargreaves had negotiated a lower management fee with Mr Woodford, meaning less of its clients' cash went to the fund house and therefore more will be returned to the consumer.
All other platforms hold the C share class. Today’s letter shows those investors will receive 58.6p per share, if in accumulation, and 48.2p per share if receiving income.
Link stated investors would receive their first payment on or around January 30.
Investors in the C share class have lost 28.7 per cent of the value of their assets in the Woodford Equity Income fund over the past five years, 37.2 per cent over the past three years and 29 per cent in the past year, according to data from FE Analytics.
Therefore, the extent of an investor's loss will also relate to when they invested in the fund.
According to Jason Hollands, managing director at Tilney, those who came in at launch have lost about 20.8 per cent of their money while investors who chose to back Mr Woodford at the fund’s peak, in June 2017, will be staring at a loss of about 43 per cent.
The assets involved in this part of the payout represent about 70 per cent of the fund, made up primarily of the sellable, liquid holdings fund house Blackrock had been tasked with winding up.
The remaining assets — the illiquid holdings — are still in the process of being sold by PJT Park Hill so investors remain in the dark regarding the full value of their return.
Investors have been unable to withdraw their cash from the fund since it was suspended on June 3 last year. It had been struggling with a sustained period of outflows and was unable to meet the requested redemptions.
On October 15, Mr Woodford was fired from the fund before walking away from his two remaining investment vehicles. By the end of the day, he had announced his investment firm Woodford Investment Management would close.
Since the fund was suspended on June 3, the fund has lost 19.7 per cent. By comparison, the FTSE All Share has risen 7.2 per cent over the same time period.
Ryan Hughes, head of active portfolios at AJ Bell, said: “In some respects, today represents the first day of closure for investors who have suffered from the terrible performance of the Woodford Equity Income fund.