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Fourth capital distribution to investors in the Woodford Equity Income Fund

Leigh Day understands that, as part of the winding-up of the Woodford Equity Income Fund (WEIF), a capital distribution took place on 11 December 2020.

Posted on 11 December 2020

Link Fund Solutions Limited (Link), WEIF’s authorised corporate director, has, since around the start of 2020, been selling the assets held in the fund and distributing the proceeds to WEIF shareholders.

The most recent distribution is the fourth one, and the total amount available for distribution this time was £98.48 million.

For investors, the distribution amounts to between 2.1 and 2.7 pence for each share held. In other words, if an investor has 100 shares of a particular class locked in WEIF, the investor could receive between £2.15 and £2.74 as part of the fourth distribution.

With this fourth capital distribution, the total now returned to investors comes to 70.4 per cent of the fund’s value at suspension. At its suspension, on 3 June 2019, the fund was valued at £3.61 billion and, through four capital distributions, investors have so far received back a total of £2.54 billion.

On 1 September 2020, the value of the remaining assets in the fund was £288 million. Assuming those assets have not lost value between 1 September and now, the fund should still hold a value of about £190 million.

However, these remaining assets are likely to be difficult to sell. Losses to investors from the date of suspension thus range from 24 per cent to 29.7 per cent, with the range determined by the cash raised through sales of the fund’s remaining assets.

However, this is not the full extent of losses to WEIF shareholders as the fund’s value also decreased notably before it was suspended.

For the two principal share classes, losses to the average investor range from 36.7 per cent to 41 per cent for the Z Sterling Accumulation shares, and 43.5 per cent to 47.6 per cent for the Z Sterling Income shares.

Leigh Day is pursuing a claim on behalf of individuals who invested in WEIF.

Leigh Day’s investigations lead it to believe that Link allowed WEIF to hold excessive levels of illiquid or difficult-to-sell investments, and that this caused investors significant loss.

In doing so, Leigh Day considers Link breached the rules of the FCA Handbook and failed to properly carry out the management function of the Woodford Equity Income Fund.

Investors who had some shares locked in WEIF can join Leigh Day’s group claim. More information about the claim is available 

Kamran Vojdani and analyst, Jonathan Garvey

Woodford/Link group claim