Link has suspended dealing in shares in the Woodford Fund

Link Asset Services is a trading name of companies which offer a range of services, principally shareholder, treasury management, fund and corporate administration services and related products. All of the companies are owned subsidiaries of the Link Group. 

Link has continued to consider the future of the Fund over the period of its suspension from 3 June 2019 and has decided not to re-open the Fund and instead wind it up.

On 15 October 2019, Woodford Investment Management Limited, informed us that it will resign from its role. As a result of this, we expect that the redemptions in the Fund will reach a level whereby it may no longer be able to continue to meet redemption requests without damaging the interests of both remaining and redeeming investors.

Neil Woodford, Woodford Investment Management says:

“This was Link’s decision and one I cannot accept, nor believe is in the long-term interests of LF Woodford Equity Income Fund investors.”

Questions and Answers - from LFS website

1. Why did LFS suspend the Fund? 

LFS as the Fund’s authorised corporate director, has responsibility for this decision. LFS discussed its decision with the Fund’s depositary, Northern Trust Global Services SE (UK Branch) (the “Depositary”), and have also been in close discussions throughout with the Financial Conduct Authority (the “FCA”). As previously communicated to investors the decision to suspend dealings in the Fund was taken to protect all investors following an increased level of withdrawals. The suspension was intended to give Woodford Investment Management Limited, (“Woodford”), the investment manager of the Fund, time to reposition the Fund’s portfolio into more liquid investments. This would have allowed the Fund, upon lifting of the suspension of dealings, to meet redemption requests, while reducing pressure to sell assets at low prices and therefore protecting the value of the Fund. LFS had agreed with the Depositary and Woodford to seek to complete the repositioning by early December 2019, and that it would monitor progress to ensure that this date remained achievable. Furthermore, it was agreed that it would not be possible to lift the suspension and re-open the Fund until the sale of the unlisted and less liquid assets was completed. Failure to fulfil this sale before the re-opening of the Fund would risk a further suspension and unequal treatment of investors, particularly for those who continued to remain invested in the Fund. 

2. I thought the suspension was temporary, why have LFS now decided to windup the Fund? 

Whilst progress has been made in relation to repositioning the Fund’s assets during the period of suspension, unfortunately this has not been sufficient to keep the Fund on track to re-open in December. Despite the progress made, it is 2 uncertain when this repositioning would be fully achieved and LFS has therefore concluded that it is in the best interests of investors for the Fund to be wound up on the basis of an ‘orderly realisation’ of the Fund’s assets. This will allow the return of money through interim payments to investors more quickly than if the Fund had remained suspended for a longer period of time. LFS will now take the necessary steps to request formal permission from the FCA to take this action, and it is expected that the winding-up of the Fund will commence in January 2020. It is not possible to commence the winding-up any earlier due to the need for three months’ notice to be given to investors under the applicable European Directive implemented by FCA rules. 

3. Why has the Fund fallen in value? 

The net asset value of the Fund is published daily so investors can see how much their investment is worth. Any fall in the value of the Fund is a result of a fall in the value of the Fund’s underlying assets, an investment risk which applies to any investor in any UCITS fund.


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