Woodford investors take step closer to £230m payout after administrator’s takeover
Burnt investors in Neil Woodford’s collapsed fund are a step closer to a £230m payout today after the management firm behind the failed vehicle was formally taken over.
Link Fund Solutions, the administrator behind the Woodford Equity Income Fund when it imploded in 2019, has been snapped up by Dublin-based Waystone group after winning regulatory approval and completing contractual conditions.
The completion of the deal could now herald the beginning of the redress scheme for investors after the regulator brokered a deal with the firms in April this year.
Link Fund Solutions was found to have made “critical mistakes and errors” in managing the Woodford fund’s liquidity which left it vulnerable to a run from investors. Former star-stockpicker Woodford had taken increasingly splashy bets on unlisted start-ups and was forced to freeze withdrawals as investors rushed to withdraw their assets.
As part of the terms of the deal with the regulator, Link Fund Solutions’ (LFS) parent business Link Group agreed to pay redress financed in part by the sale of the firm to Waystone.
The Financial Conduct Authority (FCA) said in April that once the sale of the firm went through, LFS would “agree to settlement of the FCA’s investigation”.
Analysts at AJ Bell described the closure of the deal today as clearing a “major hurdle” in investors’ hunt for compensation from the Woodford scandal.
A court case is now scheduled to take place tomorrow on the next steps for the redress scheme and investors in the fund will then have to give the greenlight. FCA officials have encouraged those left out of pocket to agree to the terms of the scheme rather than chase more compensation in court.
The closure of the deal will see some of the 600 strong team join Waystone from Link and expand its footprint globally in territories including India.
All of the existing Link Fund Solutions investment managers and sponsors have also been transferred to the Waystone Group, taking the total assets under administration in its client base to more than $2tn.
Nancy Lewis, Interim Executive Chair, said in a statement: “After months of hard work from both teams and multiple regulatory bodies, we are delighted to welcome all LFS staff to the Waystone family.
“This is the start of a new chapter for both businesses, building a stronger platform – with further international expertise and capability – to service our current and future clients.”