In a letter sent to investors of the wound-up Woodford Equity Income Fund, Link Fund Solutions (the Authorised Corporate Director (ACD) of the Fund) has stated that there is £288 million in remaining assets to be sold off.
However, the letter goes on to state that the selling off of these remaining Woodford Fund assets is not likely to take place until the middle of next year, at the earliest. The letter informed investors:
“It is expected that some of these assets will not be realised until mid to late 2021. This means that we are unable at this time to provide a specific date by which the fund’s wind up will be complete and all cash returned to investors.
“We will continue to make capital distributions to investors as the fund’s assets are sold. We will seek to make a fourth capital distribution shortly after the transfers of the remaining assets to Acacia are complete and we will write to you again on or before 30 November 2020 with a further update.”
The administrators of the Woodford Fund came to an agreement with Acacia Research Corporation a couple of months ago in relation to the sale of a number of the Fund’s healthcare assets, which amounted to £223.9 million. This resulted in third capital distribution payments being sent to investors at the end of August.
As stated above, further assets will be sold off and transferred to Acacia Research Corporation in November, which will result in fourth capital distribution payments to investors. However, it appears investors will have to wait a while before receiving any additional payments.
Woodford Fund compensation claims
At Nelsons, since the Woodford Fund was wound-up last year, the initial focus of our investigations for clients was in respect of Hargreaves Lansdown and their seeming unwillingness to remove the Fund from their best buy lists, the Wealth 150 and later the Wealth 50.
We have been contacted and are currently representing many clients who have suffered substantial financial losses as they relied upon these lists when making investments into the Fund. We are finalising our investigations with a view to advancing a number of claims against Hargreaves Lansdown.
Link Fund Solutions Limited
During our investigations, a number of questions have arisen in relation to the part played by Link Fund Solutions, 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 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.
How can Nelsons help?
We are pursuing claims in relation to losses arising from the investment in the Fund on a no win, no fee basis.
If you have been financially impacted by the closure of the Woodford Fund and want to pursue a claim for compensation, please get in touch with Cathryn or another member of the team in Derby, Leicester and Nottingham.