Sunday, April 5, 2020

Woodford Says Sorry To Investors For Suspended Fund

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Multi billion pound fund manager Neil Woodford has said sorry to thousands of investors who have their money trapped in his suspended LF Woodford Equity Income Fund.

The fund was suspended a few days ago – and in a blog and video, Woodford explains what’s happening in a bid to reassure investors that their money is safe.

Woodford also offered some answers investors are demanding to know about their money:

What is a fund suspension?

A suspension is a freeze on requests from investors to buy, sell or transfer shares in the fund while the portfolio is managed as normal

Why is the LF Woodford Equity Income Fund suspended?

Because investors were redeeming a level of money – reportedly up to £9 million a day in May – the decision was made to allow Woodford to reposition cash invested in unquoted and illiquid stocks into more liquid investments, such as FTSE 350 companies.

Woodford says the suspension is to protect investor funds, not because of a poor trading position.

How long is the fund expected to stay suspended?

This is unknown – the situation is under daily review and will formally be reviewed every 28 days.

Woodford promises to update investors about what is going on – a letter to investors was published on June 4.

The aim is to reinvest to make more cash available should investors continue to drain money from the fund once the suspension is lifted, although Woodford says he can comment on this for regulatory reasons.

However, Woodford does maintain he is not a forced seller despite the suspension.

What happens to investor money?

As soon as the suspension lifts, investors can access their cash. The value of their investments will depend on how the shares have performed during the suspension.

Who is Neil Woodford?

Woodford made his name as a stock picker and fund manager at global platform Invesco, leaving in 2014 to set up his own business –  Woodford Investment Management.

Besides the LF Woodford Equity Income Fund, he runs the Woodford Patient Capital Trust and LF Woodford Income Focus funds.

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