Third Payment To Woodford Investors To Be Made Next Week

It has been confirmed that investors in the Woodford Fund will receive a third payment on or around 26^th August. Link Fund Solutions (the Authorised Corporate Director (ACD) of the Woodford Equity Income Fund) is currently writing to those who invested in the closed Fund to confirm the amount and date of the third capital distributions.

The capital raised for the payments has been generated through the controversial sale of a collection of assets to Acacia Research Corporation and further funds raised since the second payments were sent to investors in March 2020.

As of 19^th August, £183.2m has been made available, which will form the third distribution of payments to investors. Taking this amount into account, this means that since the Woodford Fund was wound-up in 2019, £2.45 billion has been repaid to investors.

However, it is unclear as to when investors will receive any further payments. In Link’s letter, it states that additional capital distributions “will be made” when “suitable” finances have been generated through the sale of other assets and proceeds received from Acacia Research Corporation. No amount or date has been listed in the letter.

Annual reports delayed

The letter also confirms that there will be a further delay for those wishing to see the annual accounts, as Link Fund Solutions has once again pushed back the deadline.

In an update sent to investors at the end of July, it confirmed that the annual accounts were set to be released before the end of this month, however, this has now instead changed to the end of September 2020.

Managing Director of Link Fund Solutions, Karl Midl, commented:

“While the audit is progressing satisfactorily with all parties, we have been in regular discussions with Grant Thornton, the appointed auditor of the Fund, and due to the significant amount of work involved in finalising the financial statements and the detail of the post balance sheet events (including the Acacia transaction), it is now expected that the annual accounts will be published by 30 September 2020 at the latest.”

Woodford Fund compensation claims

Hargreaves Lansdown

At Nelsons, since the Woodford Fund was wound-up in 2019, the initial focus of our investigations for clients has been in respect of Hargreaves Lansdown and their seeming unwillingness, despite mounting negative data, to remove the Woodford Equity Income Fund from their best buy lists, the Wealth 150 and later the Wealth 50.

We have many clients who have suffered substantial financial losses as they relied upon these lists when making investments into the Woodford Fund. We are finalising our investigations with a view to advancing a number of claims against Hargreaves Lansdown.

Link Fund Solutions Limited

During our early investigations, a number of questions cropped up in relation to the part played by Link Fund Solutions Limited, who have previously dismissed complaints made against them by stating that they had:

“at all times acted in accordance with applicable rules and in the best interests of all investors”.

As ACD, Link Fund Solutions had a fiduciary role and a regulatory obligation to ensure that the Woodford Fund was run in the best interests of investors, ensuring that they were protected and treated fairly. They were required to adhere to the FCA’s Principles of Business and the rules set out in the collective investments schemes sourcebook of the FCA Handbook.

Events leading up to the suspension of the Woodford Fund showed that its holdings in a number of unquoted companies in the portfolio had been listed on The International Stock Exchange in Guernsey. This allowed Neil Woodford to maintain a heavy weighting to highly illiquid companies, far in excess of the 10% dictated by the Fund’s rules and by regulatory requirements. Link Fund Solutions were involved in the decision to designate The International Stock Exchange an eligible market for these purposes which allowed the initial listings of the shares to happen.

We’re looking at whether such decisions were indeed in the best interests of all investors or whether it could be said that investors were let down and treated unfairly by Link Fund Solutions’ apparent failure to address at a much earlier stage the substantive issue of the increasing illiquidity in the Woodford Fund.