The embattled Woodford Equity Income Fund is to be wound up following a decision by Link Fund Solutions that Neil Woodford has said goes against the best interests of investors.
Link, the authorised corporate director of the fund, announced last night that it will wind up the Woodford Equity Income Fund (WEIF). BlackRock Advisers have been appointed as transition managers.
Woodford said in response to the news: "This was Link's decision and one I cannot accept, nor believe is in the long-term interests of LF Woodford Equity Income Fund investors."
Woodford ceased to be the investment manager for the fund immediately following Link's decision.
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The fund had been suspended due to liquidity issues since June this year, when Woodford famously issued a tearful YouTube apology to investors whose money was frozen.
In August, Link extended the suspension. It said at the time the WEIF was likely to remain suspended until December.
Link said in a statement that it has been in discussions with the UK Financial Conduct Authority in relation to the decision and the decision has been subject to due diligence required by the fund's depository Northern Trust.
The winding up is expected to commence in January, as European law requires investors are given three months' notice.
The suspension was intended to give Woodford time to reposition the WEIF portfolio in more liquid investments.
"It was agreed that it would not be possible to lift the suspension and re-open the fund until the sale of its unlisted and less liquid listed assets was completed," Link said in a letter to investors.
"Failure to do so before the re-opening of the fund would risk a further suspension and unequal treatment of investors, particularly for those who chose to continue to remain invested in the fund."
The terms of the suspension were not met, Link indicated.
"Whilst progress has been made in relation to repositioning the fund's portfolio, this has unfortunately not been sufficient to allow reasonable certainty as to when the repositioning would be fully achieved and the fund could be re-opened," he said.
Link anticipates the first capital distributions as a result of the wind up will be paid in January next year.
"After we have taken account of any liabilities which the fund owes, and of the costs incurred in the winding up, we will begin a process of paying you your share of the proceeds of the realisation of its assets as soon as possible. This will be done by means of a number of capital distributions made to all investors in the fund," it said.
The FCA continues to investigate the activities that led to the fund's suspension.