The Daily Telegraph - Saturday - Money
Pensioner lost £100,000 in Woodford collapse – and his nightmare isn’t over
Ian Duffield invested more than £200,000 in the Woodford fund – and when the dust has settled, he will likely have lost more than half of that figure.
The 69-year- old retiree is worried about what this will mean for his disabled wife when he dies, as there will be less left to her than he had previously hoped.
“I am effectively going to be leaving my wife significantly less than we expected. Of course, myself, in my retirement, that’s a lot of money to lose from what was supposed to be a relatively safe environment,” he said.
At its peak in 2017, the Woodford Equity Income Fund was worth more than £10bn, but by the time it collapsed this had fallen to just £3.7bn.
The fund, which was gated in June 2019, halting withdrawals, was administered by Link Fund Solutions ( LFSL), which acted as an authorised corporate director. It was responsible for managing the liquidity of the fund.
The Financial Conduct Authority ( FCA) opened an investigation following the fund’s liquidity crisis.
Woodford victims have received some but not all of their money back and many of the more illiquid assets
have proved difficult to sell, meaning there is still about £50m in the fund.
Link Group, the parent company of Link Fund Solutions, has offered £60m to bolster what is paid out to consumers. The company is eager to settle claims quickly using a scheme of arrangement, which is an agreement between a business and its creditors.
The FCA has strongly encouraged investors to support the compromise as the “quickest and best” outcome.
Investors have until Monday to decide whether to rubber-stamp the scheme of arrangement, before a sanction hearing before the High Court next month. The scheme will pass if it is approved by more than 50pc of investors representing 75pc of the remaining value of the fund.
But individual and retail investors feel that their dissenting voices will be drowned out by larger institutional actors. They are concerned that the small print of the scheme blocks them from making further claims against other parties involved in the scandal.
Mr Duffield is disappointed by the FCA’s handling of the case, including its strong support of the scheme of arrangement. Campaign groups have also criticised the offer on the table.
A spokesman for Link Fund Solutions said: “LFSL believes the scheme is the best option available for investors, both materially enhancing the amount of redress available from LFSL and providing the fastest route for redress possible.”
The FCA said: “This scheme represents the best way for most people to get money back. Any other routes are highly uncertain, would take much longer and unlikely to deliver anywhere near the levels of redress being suggested elsewhere.”