Woodford investors face long wait for cash as stocks are liquidated
Savers in fallen City star Neil Woodford’s flagship fund could have to wait more than a year to recoup some of their cash due a raft of hard-to-sell stocks which must be liquidated.
Administrators Link Fund Solutions on Monday appointed fund giant BlackRock as a so-called “transition manager” to cash-out the shuttered £3 billion Equity Income Fund portfolio and start returning cash to savers.
Some of that will be returned to investors starting in January.
But the process of liquidating the entire portfolio could take up to a year, people familiar with the transition management industry said, because the portfolios stocks are thinly traded, making it difficult for BlackRock to sell at a good price.
BlackRock has experience in offloading Woodford portfolios. Market sources said it was hired to move his £3.5 billion St James’s Place portfolio to Columbia Threadneedle and RWC.
A spokesman for BlackRock declined to comment.
The fund firm has already got its hands on half of Woodford’s stocks after £1 billion worth of holdings were removed from his grasp.
Stock-market filings show more than 15 Woodford holdings changed hands yesterday, including big stakes in Burford Capital, Purplebricks and Provident Financial.
The speed of the transfer, coming immediately after Woodford was ousted as manager of the £3 billion Equity Income Fund, underscores the rapid downfall of the one-time fund star.
Stocks transferred also include Eddie Stobart, Allied Minds, Crest Nicholson, Countryside and Arix Bioscience.
Woodford was ousted as manager of his flagship fund on Monday. He was not aware he was due to be fired
Woodford’s exit prompted his resignation from his other fund, Woodford Income Focus Fund, which was suspended today. It also triggered the closure of Woodford Investment Management, the company that runs the funds. Around 30 jobs are set to go following a consultation process.
Woodford has also resigned from the listed Woodford Patient Capital Trust. That caused WPCT’s shares to plummet 7% today to a historic low of 30p, meaning investors have lost 70p in the pound since it floated in 2015.
The trust is set to appoint a new manager within the next few weeks.
PJT Park Hill is selling a £1 billion portfolio of unlisted healthcare, industrial and tech stocks with bids due in this week.
