Woodford investors set for payout in January
BlackRock has sold off £1.65bn of the fund’s assets.
Investors in troubled manager Neil Woodford’s flagship fund will see their first payouts when it winds up early in the new year with the permission of the Financial Conduct Authority.
The Woodford Equity Income Fund, which has been suspended for nearly six months, will be wound up from January 18, administrator Link Asset Services said.
Meanwhile, Link revealed that BlackRock, the US investment bank selling off the fund’s assets, has raised £1.65 billion by selling 56% of the fund since it took on the task last month.
The bank has focused on one part of the fund, Portfolio A, but warned that the remaining fifth of that portfolio is now a lot more difficult to sell than the low hanging fruit which has been offloaded.
“It is important to note that BlackRock has managed to realise the assets in Portfolio A in a way that safeguards value in those assets rather than through a ‘fire sale’,” said Link.
“BlackRock will continue with this approach for the liquidation of the remaining 21% of Portfolio A which are generally less liquid stocks than those assets sold so far.”
The second part of the fund, Portfolio B, is invested in much more illiquid assets, that are difficult to sell. This task has fallen to specialists at Park Hill.
“At this stage we are unable to confirm when these assets will be sold,” Link said.
It means that investors will now get their first payout since the fund was suspended on January 20. More money will follow as the assets are sold while the fund winds up.
The FCA has also approved plans to change the fund’s name to LF Equity Income Fund after Mr Woodford stepped down from managing it.
A former darling of the City, Mr Woodford fell from grace earlier this year when he was forced to suspend his fund after investors tried to cash out too quickly.
The fund had invested in assets that were difficult to sell off quickly, making it vulnerable when investors tried to withdraw their cash.