United Kingdom

Woodford's administrator in spotlight as investors face further losses

The reputation of the firm overseeing Neil Woodford's failed fund took another battering as investors faced further losses and threatened it with legal action.

Link Fund Solutions said it had reached an agreement to sell a 'significant portion' of the remaining assets in the stricken Equity Income Fund.

But the deal values them at £442million – or £116million less than their stated value two weeks ago.

Link Fund Solutions said it had reached an agreement to sell a 'significant portion' of the remaining assets in Neil Woodford's stricken Equity Income Fund

In a further blow to investors whose savings have been locked in the fund for over a year, there was no sign of when they might actually see the money.

And now London law firm Nelsons is threatening to sue Link on behalf of investors, for failing to stand up for their best interests before the fund collapsed last year.

Link said Acacia Research Corporation, a US firm which invests in early-stage technologies, will snap up the biotechnology stocks held by the Woodford Equity Income fund for up to £223.9million. 

But Link warned that under the terms of this deal, investors may not actually receive payment for up to six months.

Adrian Lowcock, of investment firm Willis Owen, said: 'Rather disappointingly there is no detail on what was sold, for how much and what the losses were on those investments.

'Investors should be given an idea of what the costs incurred for this deal are and what they could expect to see back. 

It would also help to have an update on the progress with the remaining investments, but these are most likely the ones that the fund will find hardest to sell.'

A few assets, currently worth £218million, are still left to sell. As long as their value falls no further, savers will get back a maximum of only £2.7billion. This is a loss of 27 per cent since the fund first froze their money a year ago.

Many will have lost much more, as they piled their savings into Woodford's once-lauded fund when the value of its assets was higher, and it was much more expensive to invest.

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