By Simon Jessop
LONDON (Reuters) – Embattled money manager Neil Woodford’s suspended LF Woodford Equity Income Fund is to be wound up, the fund’s authorized corporate director Link Fund Solutions (LFS) said on Tuesday.
Woodford, one of Britain’s most high-profile fund managers, had his flagship 4.3 billion pounds ($5.4 billion) fund suspended from trading in June after an increase in demand from clients to take their money back.
At the heart of Woodford’s troubles was the scale of his holdings in unlisted or illiquid assets, which are hard to sell quickly and which have become a focal point for the British regulator’s ire in subsequent weeks.
Despite seeking to sell down his illiquid holdings and move into liquid stocks ahead of a planned December reopening of the fund, Link said on Tuesday the process was not going as planned.
“Whilst progress has been made in relation to repositioning the Fund’s assets, 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,” Link said in a letter to investors.
“LFS has concluded that an orderly realization of the Fund’s assets allows the return of money through interim payments to investors more quickly than if the Fund had remained suspended for a longer period of time.”
As a result of the decision, Neil Woodford will cease to be the investment manager of the fund with immediate effect and the fund’s assets will be split into two portfolios managed by others.
BlackRock (NYSE:) Advisers will take charge of selling the fund’s listed assets while PJT Partners will continue with its previously agreed role in helping to sell the fund’s highly illiquid assets, Link said.
The winding up of the fund will begin on Jan. 17, 2020. In a separate statement, the Woodford Patient Capital Trust said its board would continue to review its management arrangements and would make a further announcement in due course.
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