Link Fund Solutions has defended the price tag on its sale of healthcare assets from the stricken Woodford Equity Income fund as it told investors they would receive their share of the cash by the end of August.
In a letter sent to investors today (July 29), Link said the transaction “should be judged as a whole” and that reports relating to the values of single assets within the sold portfolio “could be misleading”.
At the beginning of June Link announced it had agreed to sell 50 per cent of the fund’s remaining assets to Acacia for £224m — a deal later branded ‘undercut’ when Acacia re-sold on some of the assets for a higher figure.
But in today’s letter, Link refuted the sale was for a low price, saying: “The transaction is for the sale of a portfolio of the fund’s shareholdings (rather than a series of sales of individual assets) [so] investors are reminded that the transaction should be judged as a whole.
“You should be aware that reports relating to the values attributed to the transfer of single assets forming part of the portfolio can be misleading.”
The comments came as Link told investors they would receive the proceeds of the sale next month.
Under the transaction with Acacia, the portfolio of assets sold are being individually transferred at different times, with the fund receiving the payment for specific assets when they have been moved over.
As at July 22, the now-defunct fund holds about £58m in cash available to be distributed to investors, but this is expected to increase as further amounts are received from Acacia.
Link said it would make a single distribution of all of the cash raised from the sold assets received up to August 19. Investors will be told how much they will receive on August 21 and the payment will follow shortly after.
Investors in the fund have already received more than 75 per cent of their assets from payouts in January and March, primarily from the quoted, sellable part of the portfolio.
Looking forward, Link warned investors the assets that remained to be sold outside the Acacia deal were the “less liquid” assets of the fund and that disposing of the stocks could take longer than was the case for the sales so far.
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