INVESTMENT FUNDS: Trapped Woodford investors to receive payment this week.

As published on internationalinvestment.net, Tuesday 24 March, 2020.

Over 300,000 investors trapped in Neil Woodford's flagship £3.7bn equity fund will share a £143m payment this week.

In a letter to investors, published on Friday, the fund's administrators Link Fund Solutions said it had raised £143.2m in its second sell-off of the portfolio's assets and that investors would be paid on or around March 25.

About £575m will still be trapped in the vehicle, whose suspension last June prompted Europe's biggest investment scandal for a decade.

The fund was suspended in June 2019 following a period of poor performance and outflows running at £9m per working day.

In October, Woodford Investment Management was removed as manager of the fund.

Ryan Hughes, head of active portfolios at AJ Bell, the fund supermarket, has said that while the latest repayment was a "glimmer of hope" for the fund's investors, they would be unlikely to reclaim all their savings until next year. "We've seen market conditions deteriorate considerably, meaning that selling any unlisted and illiquid assets is likely to become much harder," he said.

"Sadly this means that it looks like investors are in for a long wait before they see the remainder of their money paid out of the fund." He added: "While the asset manager will balance the competing needs to sell assets at a good price versus the saga dragging on for years, it seems inevitable that this will rumble on into 2021."

They will receive between 3.1p and 3.9p per share, depending on who was involved in the fund's distribution and whether the investor was in accumulation or receiving an income on their investment.

The share class receiving the highest return is the Z share class, which represents Hargreaves Lansdown clients.

Hargreaves investors in accumulation and receiving income will get 3.97p and 3.26p per share respectively.

The new payment will bring the total to have been returned to clients since the end of October to £2.3bn. About £700m is estimated to still be trapped in the fund.

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