Woodford investor? Your first payment is coming soon

Private investors left stranded by the collapse of the Woodford Equity Income fund will soon be getting at least some of their money back. But they will have to wait a while longer to see how much more – if any – they will receive.

By John Stepek

published 28 January 2020

in Features

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.

MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

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.

Explore More