Investors in the former Woodford Equity Income fund could be forced to wait until 2023 before getting their hands on the rest of the money tied up in the fund’s assets.
‘Due to the nature of the fund’s remaining assets and our commitment to achieving the best outcome for investors it is possible that the wind up of the fund may not be completed by the end of 2022,’ read a statement today (15 March 2022) from Link Fund Solutions, the fund’s administrator.
‘It looks like investors in the ex-Woodford Equity Income fund need to brace themselves for a further delay in the sale of the remaining assets with Link now saying that it’s possible that the wind-up of the fund may not be completed by the end of 2022, having previously hoped the process would be finished by then,’ said Ryan Hughes, head of investment research at AJ Bell.
NEARLY £141 MILLION STILL TIED UP
Link has sold the majority of the fund’s assets and had handed cash back to investors via four capital distributions worth £2.54 billion in total. However, an additional £140.93 million (as of 28 February 2022 valuation) remains tied up in unlisted companies that include online bank Atom Bank, drug discovery tech business Benevolent AI, and Origin, a computer games maker.
Stakes in Drayson, Mafic, Nexeon, RM2, Rutherford Healthcare and Sabina Estates are also still to be liquidated.
‘This will be extremely disappointing for investors locked in the fund,’ said AJ Bell’s Hughes. ‘It seems that little progress has been made on disposing the remaining assets in the fund since Link’s last update just over three months ago,’ the fund expert said.
‘It’s interesting that Cambridge Innovation Capital is no longer listed in the assets to be sold which leaves nine positions remaining. Investors may be heartened to see that the value of those assets has actually increased since the last update with a 13% pick up in the value stated by Link since the end of February, which compares favourably to the performance of the FTSE All Share index but this will be of little comfort given the longer term performance.
SHOW ME THE MONEY
‘Investors will be more focused on when they can finally get the remainder of their money back and there is no commitment in the latest update on this front. It’s been 15 months since investors had their last distribution which shows just how challenging it is to try and sell the remaining assets into a market where the buyers hold all the cards.
‘While Link will be trying to ensure they get the best possible price for the assets, it’s also important to balance the length of time investors are having to wait. I suspect many would now simply accept a lower price to get the sale completed so they can draw a line under this sorry saga and move on, not least as we are now close to three years since the fund was suspended,’ concluded AJ Bell’s Hughes.
