Woodford Investment Management  

Woodford debacle wipes £63m off pension fund

Woodford debacle wipes £63m off pension fund

Kent County Council has seen its investment in Neil Woodford's flagship Equity Income fund drop by £63m since it tried to pull its money out in June.

According to documents released last week by Kent County Council, the market value of the pension fund’s investment decreased to £197m at the end of September, from £260m at the end of March — a drop of 24 per cent.

On June 3 Kent County Council had requested to pull the £260m it had invested in Woodford Equity Income through its pension scheme.

The fund had been struggling with outflows which were running at a net £9m per working day in May but Neil Woodford's representatives had played down fears about the fund's liquidity, saying outflows had become moderate and that the fund manager remained as confident as ever his strategy would pay off.

But when Kent County Council’s request arrived the fund did not have enough liquidity to meet the redemptions and was suspended and the council's investment locked inside.

The pension scheme, with a total of £6.4bn in assets, has 3.1 per cent of its holdings invested in Woodford’s Equity Income fund.

In the county council update Nick Vickers, pension fund business partner, said the fund had had an unusually poor quarter with most equity managers underperforming.

He said: “In fact, of the active managers only Schroders UK Equities and Sarasin Global Equities outperformed the benchmark. The Woodford return also significantly detracted from performance.”

In the third quarter the fund had a negative return of 11.77 per cent, which compared to a benchmark of 1.27 per cent.

Kent Council stated it would end up receiving the funds later than its officials had hoped.

“However, the delay in recouping the Kent Pension Fund’s investment will not impact on the fund or its ability to pay members,” it added.

maria.espadinha@ft.com

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