Woodford investors receive first redress payments from £230 million scheme

by | Mar 28, 2024

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Investors in the fund formerly known as the Woodford Equity Income Fund are set to receive £185.7 million as Link Fund Solution issues the first payments to holders. AJ Bell Investments interim managing director Ryan Hughes comments on the latest development in the ongoing saga of compensating investors in the befallen Woodford fund saying:

“It’s almost five years since the Woodford Equity Income fund shocked investors and suspended redemptions, locking up over £3.5bn of investments for more than 300,000 investors. At that point, few would have thought that this saga would still be rumbling on five years later having seen a long chain of events that has now culminated in investors receiving their first compensation payment from the scheme. The scheme has been set up and funded by Link Fund Solutions Limited, which oversaw the fund managed by former star manager Neil Woodford, following agreement with the FCA.

“This settlement scheme is not without controversy, as despite nearly 94% of investors voting to approve the scheme, many investors remain of the view that it does not go far enough. With around £230m available to distribute to investors, this first payment of just under £186m makes up around 80% of the total with subsequent smaller payments to follow. The amount investors receive is effectively a unit rate per share, along similar lines to the various distributions that have been made since suspension as the underlying assets have been sold down. When added together it will mean that investors have received close to 80% of the value of their investment from the day of suspension back in 2019. While this won’t be enough to satisfy many of the investors who have suffered as a resulted of this fiasco, for others it will represent an opportunity to move forward having voted to approve the scheme through gritted teeth recognising that this may be their best chance of receiving some form of redress.”

Further details of the scheme can be found on the FCA website.

 
 

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