Asset manager Aberdeen Standard (SLA.L) is set to take control of one of fallen money manager Neil Woodford’s frozen funds.
Administrators for the Woodford Income Focus Fund, which was frozen in mid-October, said on Friday that Standard Life Investments will take over as fund manager on December 31. The fund’s name will be changed to “ASI Income Focus Fund”, scrubbing Woodford from the fund.
The appointment follows the collapse of Neil Woodford’s investment company in October. Withdrawals from the Income Focus Fund, one of Woodford’s three flagship funds, were temporarily halted shortly after as investors rushed to pull money from the fund. Around £250m in locked in the fund.
Karl Midl, managing director of fund administrators Link Fund Solutions, said in a letter to investors that the appointment gives “sufficient assurance of the long term viability of the fund” and would allow it to re-open the fund to investor withdrawals “no later than February 2020.”
However, Midl warned that investment returns may not be what investors had hoped for.
“ASI [Aberdeen Standard Investments] will need a period of time to re-position the Fund’s investments into a portfolio that is constructed in the way that ASI considers is best positioned to add value for investors,”Midl wrote.
“As the Fund is re-positioned we will be reviewing with ASI whether the Fund’s income yield target as stated in the Prospectus remains achievable. We will notify you of any proposed changes in accordance with regulatory requirements.”
Link Asset Services, Aberdeen Standard, and fund depositary Northern Trust have all agreed to waive fees until May 2020. Midl said Link would update investors again in mid-January.
The Income Focus Fund is the last fund remaining under Woodford’s control following his spectacular fall from grace.
Woodford built a reputation as a star stockpicker during a career spanning over 25 years at Invesco Perpetual, before leaving in 2013 to set up a firm bearing his name. Assets in his flagship Equity Income Fund peaked at £10bn in 2017, but underperformance led to significant outflows over the last three years.
Woodford was forced to suspend his flagship £3bn Equity Income Fund in July after problems with liquidity. The crisis ultimately led to the collapse of his entire business months later.