Investors in Neil Woodford’s frozen fund to incur £10m in charges
Investors trapped in Woodford Equity Income face charges of £10m from the wind-up of the fund.
In a letter to investors, administrator Link Fund Solutions detailed costs of £5m accrued since mid-October when it sacked Neil Woodford and announced liquidation plans.
Provision for a further £5.3m of costs has also been made.
The charges will pay Blackrock, who was charged with selling off its liquid assets, and Park Hill, which is offloading the fund’s illiquid holdings. Administrator Link has waived its charge during the wind-up of the frozen fund.
AJ Bell head of active portfolios Ryan Hughes told City A.M.: “The new update from Link brings some additional insight in to the winding up process of the fund for investors, especially around the transaction costs involved and the frequency of pricing updates going forwards.”
“It looks as if investors will be suffering around £10m of fees and costs to wind up the fund which will be seen as another kick in the teeth for investors who have already seen substantial losses on their investments,” said Hughes.
The costs add to the steep losses investors are already facing. Link said investors can expect the first repayment to reach their accounts on 30 January.
Brokerage charges will be applied, which the administrator said would be at a similar level to that incurred prior to the wind-up of the fund.
“Investors should brace themselves for a long wait for the remainder of their money, however much that may be,” Hughes said.
A further £22.5m has been set aside to cover the cost of Woodford’s funding pledges.
Chief among these is a funding promise to the cancer treatment company Rutherford Health, which demanded £7.5m from the fund this week.
The company could still draw down the £10m that remains from Woodford’s pledge before the end of August.