No closure for Woodford investors until 2022

In a recent update, Link Fund Solutions, which is managing the winding up of the Woodford Equity Income Fund has said that investors will have to wait until at least 2022 to get the rest of their money back – by Hannah Barnaby

 
Link said it was unable to provide an exact date for when investors will next receive a payment, as it is still in the process of selling down £123.6m worth of assets in the fund.

Thus far £2.54bn has been returned to investors via four distributions; the remaining amount should be returned to investors in a fifth distribution, and may change depending on the sale price of companies still in the fund’s portfolio.

In a letter to investors, Link said that it was unable to provide an exact date for when investors will next receive a payment, noting that they ‘hoped that the sale of the remaining assets will be concluded in 2022’adding ‘however, it is not possible to provide a definitive end date’.
 
The fund currently still has eight holdings:

Atom Bank

Benevolent AI

Cambridge Innovation Capital

Mafic

Nexeon

RM2

Rutherford Healthcare

Sabina Estates

It is also invested in the BlackRock ICS Sterling Liquidity Fund which was used to invest proceeds of sales before they were distributed.
 
Link’s letter also noted that the fund has had to invest further capital in some holdings to facilitate their later sale; £1.5 million has been invested in Mafic since April last year to ‘simplify its corporate structure, to meet required cashflow and appoint an investment bank to progress the company to the next stage of its growth’.

Similarly, Origin has received £280,000; Link does not expect any further investments in the holdings, saying: ‘We appreciate that this continues to be a difficult time for investors and we would like to reassure you that we have taken all possible steps to act in investors’ best interests in returning cash to you at the earliest opportunity by not conducting a fire sale of assets.’

Investors were prevented from withdrawing their investment from the fund in June 2019; it was ‘gated’ due to the fund being unable to sell its illiquid assets to meet a heavy flow of redemptions.

Woodford Investment Management closed after Link announced the fund would be liquidated in October 2019; Mr Woodford CBE has most recently been linked to a healthcare portfolio planned by WCM Partners.