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The star manager of the United Kingdom of Woodford is forced to close the flagship fund



The UK's most famous manager is forced to cease its flagship fund after a month's halt.

In a letter to investors on Tuesday morning, administrators of the Woodford Equity Income Fund, managed by star manager Neil Woodford, said the fund would be closed and the money would be returned to investors at the earliest opportunity.

Woodford was also removed as an investment manager and the fund should be renamed.

A letter from the administrators of Link Fund Solutions (LFS) stated that the decision was made after a careful review of the fund and its units.

In a statement, Woodford said: "It was a decision by Link and one I cannot accept, nor do I believe, is in the long-term interest of LF Woodford Equity Income Fund investors. "

The Woodford Private Equity Fund was halted in June after poor performance and a sharp increase in investor buybacks, which took it from £ 1

0.2 billion ($ 12.9 billion) of assets under management to its peak to barely £ 3.7 billion by end-May 2019

Woodford's equity return returned a 35.9% loss to investors over three years, while patient confidence in the capital investment it also manages is lost 59.21% over the same period, its smaller Focus Income Fund lost 20% in recent is 1965.

Efforts have been made to suspend the portfolio and to dispose of a significant portion of its liquid and illiquid assets after the shutdown. the redistribution will be fully accomplished, "which would allow the Fund to reopen.

The Fund's assets are divided into two parts, the first comprising a list of assets to be managed by BlackRock in preparation for liquidation.

The second part consists of unregistered and highly illiquid assets, which will be sold by LFS with the assistance of a specialist Park Hill broker.

Adrian Lowcock, head of personal investing at Willis Owen's investment platform, called the news "really shocking."

"We are witnessing the complete demise of the most famous fund manager that the UK has seen for years," he said, adding that the collapse would "shake the financial industry to its core."

What next for investors?

LFS waived its fund charge from the suspension in June and investors will not charge direct fees while the fund

"However, investors will still have high liquidation costs for the fund, especially for the sale of illiquid assets "explained Ryan Hughes, Senior Portfolio Manager at AJ Bell Investment Platform. [19659002] "These costs will be deducted from any proceeds from the sale, so they will eat up the money that investors will get back."

The winding-up will begin in January 2020, after which investors will receive their first gain, as money will sell the liquid assets, Hughes explained, but it will take some time before they receive their full money.

"A liquidity assessment by the Fund and provided to the FCA in April this year shows that one-third of the Fund is in assets that will take six months to a year or more to are being liquidated, "Hughes said. "The portfolio has shifted a bit since then, but it's unlikely to be a quick process."


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