Woodford Investment Management  

Woodford sell-off could drag into 2023

Woodford sell-off could drag into 2023
 

Investors in the Woodford Equity Fund may have to wait until next year to receive the remainder of their holdings.

In a statement today (March 15), the fund’s authorised corporate director, Link Solutions, said it has sold the majority of the fund’s assets, but cannot provide a specific date for the next capital distribution.

“Due to the nature of the fund’s remaining assets and our commitment to achieving the best outcome for investors it is possible that the wind up of the fund may not be completed by the end of 2022," it said.  

As of February 28, Link has made four capital distributions to investors totalling £2.54bn. 

The value of the fund is now £141mn, and it still holds shareholdings in Atom Bank, Benevolent AI, Drayson, Mafic, Nexeon, Origin, RM2, Rutherford Healthcare and Sabina Estates.

Link will now release the fund’s net asset value on a quarterly, rather than monthly, basis.

This means that after the next NAV publication, on June 30, the next valuation will be released on the last business day of September.

Ryan Hughes, head of investment research at AJ Bell, said that investors need to brace themselves for a further delay in the sale of the remaining assets.

“This will be extremely disappointing for investors locked in the fund,” he said, adding that it seems that little progress has been made on disposing the remaining assets in the fund since Link’s last update three months ago. 

“Investors may be heartened to see that the value of those assets has actually increased since the last update with a 13 per cent pick up in the value stated by Link since the end of February, which compares favourably to the performance of the FTSE All Share index but this will be of little comfort given the longer term performance.”

He added that it has been 15 months since investors had their last distribution which shows just how challenging it is to try and sell the remaining assets into a market where “the buyers hold all the cards”.

While Link will be trying to ensure they get the best possible price for the assets, he said, it is also important to balance the length of time investors are having to wait. 

“I suspect many would now simply accept a lower price to get the sale completed so they can draw a line under this sorry saga and move on, not least as we are now close to three years since the fund suspended.”

Woodford: what happened?

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

A month later Kent County Council asked to withdraw all of the £250mn 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.