UK markets closed
  • FTSE 100

    5,860.28
    +74.63 (+1.29%)
     
  • FTSE 250

    18,109.57
    +215.15 (+1.20%)
     
  • AIM

    980.45
    +11.44 (+1.18%)
     
  • GBP/EUR

    1.0991
    -0.0071 (-0.64%)
     
  • GBP/USD

    1.3038
    -0.0042 (-0.32%)
     
  • BTC-GBP

    9,899.45
    +31.75 (+0.32%)
     
  • CMC Crypto 200

    260.05
    -1.40 (-0.54%)
     
  • S&P 500

    3,465.39
    +11.90 (+0.34%)
     
  • DOW

    28,335.57
    -28.09 (-0.10%)
     
  • CRUDE OIL

    39.78
    -0.86 (-2.12%)
     
  • GOLD FUTURES

    1,903.40
    -1.20 (-0.06%)
     
  • NIKKEI 225

    23,516.59
    +42.32 (+0.18%)
     
  • HANG SENG

    24,918.78
    +132.65 (+0.54%)
     
  • DAX

    12,645.75
    +102.69 (+0.82%)
     
  • CAC 40

    4,909.64
    +58.26 (+1.20%)
     

Woodford investors hit with £16m bill for fund wind up

Sam Benstead
·3-min read
Neil Woodford - Troika 
Neil Woodford - Troika

Savers who backed Neil Woodford's toxic Equity Income Fund have been warned they face another year's wait to get the rest of their money back, as administrators revealed that fees linked to a fire sale of assets have hit £16m.

A total of £2.5bn has been handed back to investors since administrator Link decided to wind down Equity Income a year ago - but £288m is still invested in private stocks.

Link said it could take until late 2021 to sell off the rest of the fund.

Equity Income was worth £3.6bn when it suspended, but £900m has been lost in write downs and market falls.

Once lauded as the man who made Middle England rich, Mr Woodford was fired from running his flagship fund last year after ploughing billions of pounds of savers' cash into ultra-risky and hard to sell assets.

All withdrawals were blocked, and administrator Link decided to wind down the portfolio to return whatever money could be recovered to investors.

Money manager Blackrock was tasked with offloading the fund's holdings in firms listed on the FTSE 100 and FTSE 250 and has since been paid £10m in fees.

Private equity expert PJT Park Hill was also hired, to flog stakes in small-cap and private companies that are much more difficult to offload.

PJT has so far chalked up a bill of £3.2m, but much of this part of the portfolio still has not been sold. Investors have also paid £2.5m in fees to law firm Debevoise & Plimpton.

The figures were published by Link as part of the fund's reports and accounts dated March 31 2020, which have only just been released after a long delay.

This also showed that Link was paid £361,000 for its services from April 2019 to June 2019 – when the fund was initially suspended. After trapping savers' money inside the portfolio, Link waived its administration fee. It has also returned £1.2m as a gesture of good will.

Ryan Hughes, of stock broker AJ Bell, said the latest update from Link does little to ease the pain for embattled investors stuck in the fund.

He said: "Everything is still dependent on Link being able to offload the remaining £288m left in the fund which may be challenging given market conditions are being severely impacted by coronavirus."

Mr Hughes added that investors would find it hard to stomach the £16m in fees paid to to carry out a process not all agreed with.

He said: "These fees would have been due regardless of who was selling the assets but seeing such sums will make for painful reading."

Money so far recovered has been handed back to investors in three payments, with a fourth due soon following the sale of unlisted healthcare stocks to American investment group Acacia Research. Link will give an update on this cash by November 30.

Mr Woodford, 60, was forced to suspend his flagship Equity Income fund in June 2019 after he was unable to provide dissenting investors with their money.

He was subsequently removed as manager in October and Link stepped in.