The supervisor behind under-fire manager Neil Woodford’s funds has said it could wind down another fund after Woodford resigned earlier this month.
Link Fund Solutions said it was looking for a new manager to take on the £258 million Woodford Income Focus Fund, or would consider transferring the investors into a different fund. But if these failed it might be forced to sell off assets and close the fund instead.
“If neither of the options above is viable, or it is otherwise thought to be in the best interests of investors to do so, then we will look to wind-up the fund through a process of an orderly realisation of the fund’s assets,” Link said in a letter sent to investors.
Trade Woodford Patient Capital Trust - WPCT CFD
The administrator promised that during a sale it would try to “protect value” as it sells off the fund’s assets. The money would then be passed on to investors.
The Income Focus Fund is the smallest of Woodford’s three vehicles, which also include Patient Capital, worth £799 million, and Equity Income, which held nearly £3 billion in assets.
Earlier this month, Link announced it was planning to wind up the Equity Income Fund, which had been suspended since June after too many investors tried to take their money out. Woodford was also forced to step down as manager of the fund.
Once hailed as the best stock picker of his generation, it was a climb down for Woodford, who had been criticised for putting too much money in assets that were difficult to redeem for cash. When investors started withdrawing too much, this made it impossible for the fund to meet their demands.
Link on Wednesday said that finding a new manager, or moving investors into a new fund, were the preferred options. It has hired an unnamed investment research fund to find potential new managers. Several have already shown interest.
If Link instead decides to move into a new fund, investors will be given a chance to vote on the proposal.
The administrator revealed that the fund has outperformed the benchmark index since it was suspended two weeks ago.