Woodford Income Focus – all dealing suspended
Emma Wall | Wed 16 October 2019
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- Dealing in Woodford Income Focus has been suspended
- We have waived our platform fee for the fund
- The value of the fund continues to be based on the underlying holdings
Further to our note yesterday, Link has announced that all dealing in the Woodford Income Focus fund has been suspended. Woodford Investment Management has also served notice for managing the portfolio.
Link Asset Services, the fund’s Authorised Corporate Director today announced that it would be suspending trading in the fund with effect from 15 October until further notice.
While the Woodford Income Focus fund is suspended we will not charge a platform fee. This decision is effective immediately.
Link stated that it has taken the decision to suspend trading in the Fund in anticipation of redemptions following the resignation of the fund manager.
A statement released this morning reads:
"On 15 October 2019, Woodford Investment Management Limited (“Woodford”), the Fund’s appointed investment manager, informed us that it will resign from its role. As a result of this we expect that the redemptions in the Fund will reach a level whereby it may no longer be able to continue to meet redemption requests without prejudicing the interests of both remaining and redeeming investors.
After consideration of all relevant circumstances relating to the Fund’s assets, we have come to the conclusion that it is in the best interests of all investors in the Fund to suspend the issue, cancellation, sale and redemption of shares in the Fund. The period of suspension is intended to protect investors from this anticipated increased level of redemptions in the Fund."
What happens next?
Link state that they will be using the suspension period to consider their options, including the possibility of winding up the Income Focus Fund, as they are doing for the Woodford Equity Income Fund, or appointing an alternative fund manager.
For the moment responsibility for managing the portfolio remains with Woodford Investment Management as they serve their notice period. During the suspension Link has committed to pricing the Fund on a daily basis. The value of the Fund will be based on the underlying assets.
Link will review the fund after 28 days and report to the regulator, after which the suspension may be lifted or renewed. If the suspension is lifted investors will be free to buy or sell their units.
Link announced yesterday it had decided not to re-open the Woodford Equity Income Fund. This means that the investments will be sold, and the resulting cash returned to investors.
Link has confirmed that it expected to write to investors within the next 14 days. We will be updating you further on Link’s plans for the Income Focus Fund as we know more.