Hargreaves urges Woodford Fund to repay customers

The chief executive of an investment platform that championed Neil Woodford's suspended fund has said he is "putting pressure" on the fund manager to repay his customers.

Chris Hill, chief executive of Hargreaves Lansdown, said in an update to the platform's clients that he was "angered" about the lack of resolution over the shutdown of the flagship LF Woodford Equity Income Fund.

Almost 300,000 Hargreaves Lansdown investors have around £1.6bn in assets tied up in the fund, which was suspended at the beginning of the month.

The decision to suspend it for at least 28 days was taken following a surge in withdrawals from the fund - which had a value of over £10bn at its height but had since shrunk to a reported £3.7bn.

Mr Hill said: "We are angered by the lack of resolution so far but remain actively engaged with the regulator, Woodford, Link and the Treasury Select Committee to ensure that all investors, not just those invested through Hargreaves Lansdown, are able to access their investment as soon as possible.

"We will continue to put pressure on Woodford Investment Management to sell out of their unquoted stocks in the Woodford Equity Income Fund.

"We have also urged Woodford to consider alternative ways to release capital so that investors can get access to their money as soon as possible, while balancing the need to get a fair price for assets."

Hargreaves Lansdown has been criticised for its support of Mr Woodford in its "best buy" list and in-house funds, despite having raised concerns about his Equity Income Fund's liquidity as early as November 2017.

Mr Hill told the treasury select committee this week that Mr Woodford had promised not to make any "new investment into unquoted businesses from that point," at the time.

Hargreaves then had monthly conversations with the reputable fund manager, but only found out last week that Mr Woodford's fund had later increased its proportion of unlisted stocks to breach a 10% cap on two separate occasions in 2018.

The Woodford fund breached the limit in February and March last year but did not inform Hargreaves on either occasion, Mr Hill said.

The news comes just two days after the Financial Conduct Authority (FCA) announced that it has opened a formal investigation into Mr Woodford's fund.

The watchdog will probe the fund's handling of stakes in a number of private companies, which were harder to sell quickly to meet the increase in clients demanding to redeem their investment, ultimately leading to the fund's suspension.

The FCA revealed on Tuesday that it had been in contact with the authorised manager of the fund, Link Fund Solutions, in early 2018 after the fund's breach, something Mr Hill said Hargreaves was unaware of.