Woodford Investment Management  

Close to £124m still trapped in Woodford fund

Close to £124m still trapped in Woodford fund
 Neil Woodford

Close to £124m of investors’ cash remains stuck in the Woodford Equity Income Fund, according to administrators, who are now looking to finalise the wind down process in the next year.

In an update to investors today (August 2), the fund’s administrator Link Fund Solutions said it had made four capital distributions to investors totalling £2.54bn to date, however £123.57m remained in the fund as of July 30.

The figure compares with the fund's reported NAV of £154m in February this year.

The authorised corporate director (ACD) added it had made some follow-on investments as part of its objective of seeking to preserve capital value.

The “most notable” of these investments was £0.7m invested in Mafic, involved in the production of basalt fibre in the US.

Since April 1 last year the firm has invested £1.53m into Mafic in order to help the company simplify its corporate structure and “meet required cashflow”.

Link also invested a further £0.28m into Origin, a clinical biotechnology company.

It added it doesn’t not anticipate the fund making any further investments.

No definitive date was given for the sale of the remaining assets, though Link said it hopes the sale “will be concluded in 2022”.

Woodford: what happened?

Woodford's flagship Equity Income fund had been struggling with outflows which were running at a net £9m per working day in May 2019.

A month later Kent County Council asked to withdraw all of the £250m it had invested with him through its pension fund and Kier Group, one of the fund's substantial holdings, announced a profit warning which prompted its shares to plummet by 40 per cent.

This triggered the suspension on June 3. Woodford was then scrambling to sell shares to improve the fund's liquidity in an effort to preempt a wave of redemptions when the fund reopened.

But on October 15 it was announced Mr Woodford's suspended Equity Income fund, initially touted to reopen in December, would be wound down and the former star manager fired from the fund.

He then walked from his remaining two investment vehicles before confirming he had taken the decision to close Woodford Investment Management later that day.

FCA investigation

At the end of May 2021, the chief executive of the Financial Conduct Authority told the Treasury select committee that its investigation into the failure of the LF Woodford Equity Income fund is unlikely to be published before the end of the year.

In a letter published on May 28, Nikhil Rathi said the body had completed its key interviews of 14 witnesses, and the information gathering stage of the investigation was nearly complete. 

It said it had issued over 30 information requirements which has led to the gathering of over 20,000 items of relevant material from all the key parties. 

The next stages will include analysis of the information collected and engagement with expert witnesses in case of further proceedings.

Rathi said he was confident the investigative work itself would be completed by the end of this year.