Woodford saga inches closer to the finish line with latest investor letter

Investors remaining in the former Woodford Equity Income fund will be pleased to see some elements of progress in the potential settlement with Link that was first outlined in April. The FCA found serious failings in the oversight and operation of the fund by Link and the investigation has concluded that this resulted in serious detriment for those investors who remained in the fund from September 2018. Essentially, poor liquidity management meant investors in the fund were left with disproportionately high exposure to illiquid assets which ultimately brought down the fund as it could no longer repay investors who wanted to sell their holdings.

Today’s letter is the latest correspondence from Link to investors and gives further clarity on the potential timeline of the £235m settlement, which will give hope that the sale of Link is progressing as planned. With a number of distributions having been made to investors over the past 3 years the redress payment should take the recovery level to around 77% of the value of the fund on suspension, with a very small balance left in the few remaining unquoted companies that have still to be sold.

While the letter still does not present a firm timeline for the payment of this redress, as it is still subject to the successful sale of the business, news that details of how the scheme will operate will be provided in September at least gives investors a date to focus on. That will no doubt be eagerly awaited by investors who have had to wait over four years to get to this point. While the finish line may not quite be in sight, it does seem as though the sorry saga is getting close to entering the home straight.

Read Woodford Equity Income Fund's letter