Neil Woodford's flagship fund will begin to be wound up on 18 January, with just over half of its value having so far been recovered by investment managers from its listed shareholdings.
After the Woodford Equity Income Fund was gated in June, its assets were divided into two in October, with BlackRock appointed as "transition manager" for the listed assets, selling them and using the proceeds to purchase money market funds and FTSE 100 index instruments.
Since its appointment, the investment manager has realised £1.65bn from sales, representing 79% of the value of this listed part of the portfolio, or 56% of the value of the fund.
Link Fund Solutions, the fund’s corporate director, said in a letter to investors on Friday that “we anticipate making a series of payments to investors over the coming months”, with cash returned after taking account of any liabilities that the fund owes.
The first capital distribution amount will be calculated based on the number of shares being held on 6 January, with investors receiving their first payment two weeks later.
“Although this value will fluctuate according to market movements this is the amount, together with the proceeds of any further sales of assets in Portfolio A between now and 6 January 2020, that we intend to distribute to investors on or around 20 January 2020,” Link Fund said in the letter.
The income distribution attributable to the year ending 31 December will be paid in the usual way on 28 February, plus a distribution of income covering the period 1 January to 17 January will be paid on 17 March.
“The valuation now represents a near 19% loss for investors since the fund gated at the start of June, and the fund has delivered a 3.2% loss since the 15th October, as Link wrote down the value of some of the unlisted assets," Ryan Hughes, head of active portfolios at investment platform AJ Bell, said in a statement.
“Investors can take some solace in the fact that some of the assets that have been sold to date have been reinvested back into FTSE 100 trackers, so they will have benefited from some of the post-election bounce the index has seen so far today, however this is likely to be scant consolation.”
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