ASI wins mandate to run final fund of Woodford’s empire

● Deal to bring ‘some relief’ to investors ● Duo to take control at end of this year

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Aberdeen Standard Investments (ASI) is to take over the last remaining fund run by former star manager Neil Woodford.

The deal to manage the £267 million Woodford Income Focus fund – which will be renamed ASI Income Focus – comes two months after it was frozen by administrator Link Fund Solutions.

Link had been considering options for the fund since October when Woodford decided to close his business and resign from managing the fund.

The administrator told investors yesterday that it had decided Edinburgh-based ASI, the largest active fund manager in the UK, is best placed to add value.

Ryan Hughes, head of active portfolios at investment platform AJ Bell, said the news will “bring some relief to investors” who now have some clarity as to what will happen to their money going into the New Year.

Link said ASI has provided commitments that it intends to grow the assets in the fund and attract investment.

Management of the fund will switch over to ASI’S Thomas Moore and Charles Luke at the end of December, although the fund will remain suspended.

The income fund was the last ran by the high-profile stock picker, whose Patient Capital fund was recently taken over by Schroders.

Andrew Millington, head of UK equities at ASI, said: “We recognise the issues that may have weighed on the minds of investors in the fund over the past months and we are resolute in our determination to turn things around for them.

“We will reposition the fund into a focused portfolio of our favoured, liquid UK equity income names, aiming to generate sustainable long-term income growth for its investors. The scale of our UK equity business means we will manage turnover of stocks to minimise costs and set the fund on the right track for 2020 and beyond.” Hughes said the question for investors now is should they stay with the new manager or switch into a different fund.

“Moore and Luke are both experienced equity income managers but both have underperformed the FTSE All Share index with their open ended funds over the past five years which may be cause for concern to some investors, despite Moore’s longer term track record being impressive,” he said.

“One key issue is the type of fund that the duo will now run. The announcement states that the portfolio will be concentrated to around 30 high conviction positions, however, this is significantly more concentrated than the existing funds that they manage which contain around 60 stocks,” Hughes pointed out.

“Investors may be heartened to see that there is minimal crossover between Woodford Income Focus and the portfolios managed by Moore and Luke, however, this does indicate that a significant amount of portfolio adjustment will be needed that will result in costs being incurred by investors.”