Neil Woodford investors must endure further delay to get their money after fund’s collapse

Hundreds of thousands of savers may have to wait ‘considerable’ time for their cash as administrators attempt to sell off assets

Hundreds of thousands of investors in Neil Woodford’s flagship fund must endure a further 10 days of waiting for the first repayment of their money.

Savers whose money has been frozen in the LF Equity Income Fund since June had been expecting payment of at least some of their cash on 20 January, but they were told on Friday that the date has now been pushed back due to regulatory requirements.

Thousands of investors have signed up to sue Hargreaves Lansdown, the fund supermarket that promoted Mr Woodford’s funds on its best-buy lists.

Just 63 per cent of the value of the main fund has been recovered so far, administrator Link Fund Solutions said.

Much of the remaining amount relates to holdings of unlisted shares that helped to bring about Mr Woodford’s downfall and may prove difficult to sell. Experts warned that liquidating these assets could take a “considerable” amount of time.

Link said the delay in payment would benefit investors as the holdings could be sold off at the lowest possible cost.

Investors will get the first clear idea of how much they have lost on 28 January, when Link will inform them of the size of the first repayments.

Ryan Hughes, head of active portfolios at AJ Bell, said: “Investors will be disappointed by the news that the initial payment will be delayed from the date given in the communication last month, but ultimately it’s important the fund is wound up in the appropriate manner.”

The fact that Link has not provided a hint of the progress on selling the illiquid assets in the portfolio “may be an indication that these disposals are proving to be challenging”, Mr Hughes said.

“Given this represents around one-third of the fund, investors should expect the liquidation process to continue for a considerable period.

“With updated performance figures, it is clear to see that even in the wind-up of the fund, investors have received no respite from the underperformance of the market, with the portfolio lagging by a further 5 per cent since Woodford was removed as manager of the fund – the bulk of this underperformance coming from the illiquid parts of the portfolio having their value reduced.”

Mr Woodford prompted anger again this week after it emerged that he and his business partner pocketed £13.8m in dividends in the financial year before their empire collapsed.

Despite the dire performance of the funds they managed, Mr Woodford collected around £9m and Craig Newman picked up £4.8m, while investors saw the value of their savings plunge.

In accounts filed with Companies House, Woodford Investment Management blamed the “under-performance in the Woodford Equity Income Fund combined with a period of sustained and negative press coverage” for the fund’s suspension.

The former star fund manager was hit by a crisis last year when poor performance prompted mass withdrawals by customers.

His fund was left particularly vulnerable because he had invested heavily in companies that were not listed on a stock market and therefore take some time to offload.

The company was unable to sell off assets fast enough to generate enough cash to hand back to investors, forcing the fund to be suspended, and ultimately shut down altogether.