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Woodford Equity Income to wind up

The fund has been suspended since June
October 15, 2019

Neil Woodford's flagship offering, Woodford Equity Income (GB00BLRZQB71), is to be wound down amid doubts that the fund, which suspended dealing in June, could be successfully repositioned and reopened for investors.

The fund suspended trading to give Mr Woodford time to reposition his portfolio in order to meet a heightened level of investor redemptions on the back of poor performance. However, the fund's administrator Link Fund Services said insufficient progress had been made on this front. As such, Link has removed Mr Woodford from the fund, appointing BlackRock Advisors to sell the fund's listed assets, while PJT Partners will sell its unlisted and "certainly highly illiquid" assets. The fund will be renamed as LF Equity Income.

"It was agreed that it would not be possible to lift the suspension and re-open the fund until the sale of its unlisted and less liquid listed assets was completed," Link said in a letter to investors.

"Failure to do so before the re-opening of the fund would risk a further suspension and unequal treatment of investors, particularly for those who chose to continue to remain invested in the fund. Whilst progress has been made in relation to repositioning the fund’s portfolio, this has unfortunately not been sufficient to allow reasonable certainty as to when the repositioning would be fully achieved and the fund could be re-opened.

"We have therefore concluded that it is now in the best interests of all investors for the fund to be wound up by way of an orderly realisation of the fund’s assets. This orderly realisation will allow the return of money through interim payments to investors more quickly than if the fund had remained suspended for a longer period of time."

The winding up of the fund will begin on 17 January 2020, with the fund moving to an "orderly realisation of its assets".

"After we have taken account of any liabilities which the fund owes, and of the costs incurred in the winding up, we will begin a process of paying you your share of the proceeds of the realisation of its assets as soon as possible. This will be done by means of a number of capital distributions made to all investors in the fund," Link said.