Neil Woodford has been removed as investment manager of the Equity Income Fund, which will be wound down by administrator Link Fund Solutions.
Woodford Equity Income Fund, the £3.5bn ($4.4bn) suspended flagship vehicle of Woodford Investment Management, will be wound down in January 2020, its administrator Link Fund Solutions (LFS) said today.
Neil Woodford, the firm’s founder, has been removed as investment manager of the fund with immediate effect and his name will be removed from the fund.
LFS is required to give investors three months’ notice before beginning the process of winding up the fund, which was suspended on June 3 to rebalance its balance sheet as a series of investors decided to withdraw their cash after several bad bets.
Woodford had continued to charge management fees of approximately £65,000 per day, adding to investors’ anger. LFS has waived its fee and appointed Blackrock Advisers and PJT Partners to assist with the winding-up process – both of the latter will charge fees.
The Equity Income Fund was worth more than £10bn at its peak. LFS was unable to say how much money it would be able to return to investors, but with the fund worth about a third of what it once was, it is unlikely many if not all investors will suffer losses.
LFS plans to sell liquid assets first and start returning money by the end of January, but will resist a fire sale of illiquid assets and will instead sell these off over time to limit losses.
The decision to shut the Equity Income Fund leaves the Patient Capital Trust (WPCT) in a precarious position. The latter has maintained a focus on long-term holdings, including spinouts, but the two share a large array of portfolio companies.
Woodford Investment Management does not currently earn a fee from running the trust, which issued a statement reiterating it was “undertaking a review of the company’s management arrangements and will make a further announcement in due course.”
