Woodford investor? Your first payment is coming soon

published 28 January 2020

If you’re one of the many private investors who saw a chunk of their savings left stranded by the collapse of Neil Woodford’s firm and reputation last year, then you should have received notification today that you’ll very shortly be getting at least some of your money back.

Link Fund Solutions, the fund’s administrator, has today told investors in Woodford Equity Income – formerly Woodford’s flagship vehicle – how much to expect from their first payment, which is due at the end of this week.

Depending on the precise class of share held, investors can expect to get between 46.3p per share and just under 59p. The difference in payouts is mainly between “accumulation” and “income” share classes – with the former, the dividends are rolled up as you go along, with the latter, the dividends are paid out.

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As the Financial Times reports, “based on the fund’s value when it was suspended, the latest payment to investors crystallises losses of at least 20%.”

If you’re a Woodford investor and you’re looking for the letter, you can find it here.

The good news is that this isn’t the final payout. In total, the payment represents roughly 74% of the fund’s assets.

The bad news is that this is the chunk of the fund that was relatively liquid – ie, easy to sell. As Ryan Hughes of investment platform AJ Bell points out, the rest is “trapped in the illiquid, unquoted holdings” that specialist broker Park Hill is trying to sell.

This won’t be an easy task, and for now, it’s still not clear how much longer investors will have to wait for the rest of their money – or how much they are likely to get back.

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John Stepek is a senior reporter at Bloomberg News and a former editor of MoneyWeek magazine. He graduated from Strathclyde University with a degree in psychology in 1996 and has always been fascinated by the gap between the way the market works in theory and the way it works in practice, and by how our deep-rooted instincts work against our best interests as investors.

He started out in journalism by writing articles about the specific business challenges facing family firms. In 2003, he took a job on the finance desk of Teletext, where he spent two years covering the markets and breaking financial news.

His work has been published in Families in Business, Shares magazine, Spear's Magazine, The Sunday Times, and The Spectator among others. He has also appeared as an expert commentator on BBC Radio 4's Today programme, BBC Radio Scotland, Newsnight, Daily Politics and Bloomberg. His first book, on contrarian investing, The Sceptical Investor, was released in March 2019. You can follow John on Twitter at @john_stepek.