Neil Woodford: Investors in troubled fund will have to wait until December to withdraw savings

Investors told suspension is likely to last until early December while fund is selling off assets

(Rex)

Investors in Neil Woodford’s flagship £3.5bn fund will be unable to withdraw their money until early December as the suspension that started on 3 June has been extended for the second time.

Mr Woodford, one of Britain’s best-known investment managers, was forced to freeze LF Woodford Equity Income Fund after a long run of poor performance scared investors into withdrawing their cash and leaving the fund unable to sell off assets fast enough to meet further redemption requests.

Link Asset Services, the fund’s authorised corporate director, is required to review the fund at least every 28 days.

“We anticipate that the suspension of dealing is likely to last until early December while we implement the strategy to re-position the portfolio,” it said in a letter to investors on Monday.

“In our view, this is a realistic amount of time for Woodford to complete a measured and orderly re-positioning of the fund's portfolio of assets, ensuring that there is adequate liquidity whilst preserving or realising the value of the assets.”

The “re-positioning” involves gradually selling investments at prices that would avoid deep losses for the hundreds of thousands of savers still locked into LF Woodford Equity Income Fund. An unusually high proportion of the fund has been invested in illiquid shares, meaning they could be subject to heavy discounts if a sale is required quickly.

Mr Woodford is also potentially in trouble at another fund he runs: the listed Woodford Patient Capital Trust. On Monday, WPCT said its board will assess “all potential management options” and consider third-party managers.

“[This] may or may not lead to a change in the company's management arrangements,” WPCT added.