Wood­ford in­vestors to lose another 43pc

Scottish Daily Mail - - City & Finance - by Lucy White

IN­VESTORS trapped in Neil Wood­ford’s failed £3bn fund could lose as much as 43pc of any money they have left, ac­cord­ing to a leaked re­port.

Re­search by pri­vate eq­uity house PJT Park Hill, be­fore it was ap­pointed to help wind down Wood­ford’s Eq­uity In­come fund, said an ex­tra £1.3bn could be wiped off its value as as­sets are sold.

Yet 59-year-old Wood­ford (pic­tured), who was fired from man­ag­ing the fund last month, es­ti­mated he would have lost in­vestors just 9.3pc more of their money had he been al­lowed to stay.

The be­lea­guered man­ager was sum­moned to the of­fices of Link Fund So­lu­tions, which over­sees the management of the Wood­ford funds, on Oc­to­ber 14.

Know­ing his job was in the bal­ance, Wood­ford ex­plained why he should re­main at the helm of the Eq­uity In­come fund.

A slide from that pre­sen­ta­tion, seen by the Mail claimed that Wood­ford would have lost just 9.3pc of in­vestors’ money in a worst-case sce­nario, if he man­aged to re­po­si­tion the strug­gling port­fo­lio, and if the hard-to-sell un­listed tech com­pa­nies had their value writ­ten down to zero. But be­fore he was even able to show that pre­sen­ta­tion, Link fired him on the spot.

Justin Mo­dray, of Can­did Fi­nan­cial Ad­vice, said: ‘We’ll never know whether even­tual losses would have been lower had Link not sacked Wood­ford, but since he is re­spon­si­ble for the mess in­vestors find them­selves in, it’s rather a moot point. He might en­joy more sym­pa­thy had he waived fund charges dur­ing the fund’s sus­pen­sion.’

The losses – which both Wood­ford and PJT were es­ti­mat­ing, though wildly dif­fer­ent – come on top of the huge set­backs in­vestors have al­ready suf­fered.

Since the Eq­uity In­come fund’s £10.2bn peak in 2017, its value has tum­bled more than 70pc as some in­vestors pulled their cash out and sev­eral Wood­ford bets turned sour.

Since June, when the fund banned in­vestors from pulling out their money, loyal cus­tomers have lost another 19pc of their pots.

Link com­mis­sioned the re­search from PJT – which was leaked to fi­nance news web­site Ci­ty­wire – when it was try­ing to de­cide if it should oust Wood­ford. PJT pre­dicted in­vestors would lose at least 32.5pc and up to 43pc of their money if Eq­uity In­come was liq­ui­dated and cash re­turned to back­ers. But since Link fired Wood­ford, ap­point­ing Black­rock and PJT to sell the as­sets slowly, losses could be lower than PJT ini­tially es­ti­mated, the Mail un­der­stands. Link’s de­ci­sion led to the down­fall of the man­ager’s en­tire em­pire, Wood­ford In­vest­ment Management. The fu­ture of his smaller In­come Fo­cus fund, which has been frozen since mid-Oc­to­ber and con­tains £249m of in­vestors’ cash, is still in the bal­ance. Link has short­listed man­agers to take over the fund and it has not ruled out liq­ui­dat­ing it. It said it acted in the best in­ter­ests of in­vestors to pre­vent a ‘fire sale’, and that the fund was be­ing wound up to al­low an ‘orderly real­i­sa­tion’ of its as­sets.

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