Neil Woodford’s £3.5bn equity income fund to be wound up

Michel Barnier

Michel Barnier

However, in a statement, the fund's former manager Woodford said: "This was Link's decision and one I can not accept, nor believe is in the long-term interests of LF Woodford Equity Income fund investors".

The fund was initially suspended after anxious investors started withdrawing their cash, but, because Mr Woodford and his team had bought stakes in so many unlisted companies, selling the assets was extremely hard.

Previous advice from Link had been that the fund would be suspended until December, before investors would be given a chance to cash out. Link concluded investors would get their money back more quickly if the assets were sold and the money distributed in stages - though the prices secured for assets of which the fund is a forced seller may of course face pressure.

But progress has been slow - or, in official speak, it has "not been sufficient to allow reasonable certainty" of when the fund would be shot of the illiquid investments that got Woodford into trouble. It will begin winding up the fund on 17 January, after giving investors three months' notice as required.

Link added it had considered extending the suspension of the fund and merging it with another fund, but concluded neither would be in investors' best interests, nor would they be viable options.

Link said: "The name of the fund will, subject to regulatory process, be amended to reflect the fact that Woodford will no longer be the investment manager to the fund".

The fund was suspended on 3 June after investors clamoured to withdraw their money following a series of bad stock market bets.

Link wrote: "It is not now possible to predict when the orderly sale of these remaining assets will be fully complete and when the remaining capital distributions will be paid to you and the other investors".

The fund will be split into two parts - listed and unlisted assets - with new managers from BlackRock tasked with selling the listed shares.

Specialist broker Park Hill will continue attempting to sell off the unlisted assets and return the money to investors. No word on when exactly investors can expect their cash, but at least there is now an end in sight.

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