Having lost a big chunk of their investments after getting the first part of their money back this week, investors in Neil Woodford funds have now found out they’ve been hit by a £10m charge.
Yesterday evening administrators Link contacted investors with further details on today’s payment from Woodford’s former Equity Income Fund, detailing the charges being incurred as a result of the wind-up process and the fact the fund will move to weekly pricing.
Link said £5m of costs had been accrued since mid-October, when it sacked Woodford and announced plans to liquidate the fund, and it had made a provision for a further £5.3m of costs.
These costs have been incurred in paying BlackRock, the fund giant tasked with selling off the fund's larger listed stocks, and PJT Park Hill, which is trying to sell the unlisted and listed but less liquid stocks.
Link has waived its charge during the fund's wind-up and said fees payable to BlackRock and PJT Park Hill, as well as transaction, legal and audit costs would be capped at the level of the fund's charges before the announcement of its wind-up.
Link also gave a performance update on the fund, which shows big losses compared to the FTSE All Share benchmark.
AJ Bell head of active portfolios Ryan Hughes said the new update from Link brings ‘some additional insight’ to the winding up process for investors, particularly around the transaction costs involved and the frequency of pricing updates going forward.
But he added, ‘It looks as if investors will be suffering around £10m of fees and costs to wind up the fund which will be seen as another kick in the teeth for investors who have already seen substantial losses on their investments.
‘This update also gives an indication that Park Hill have made little progress on the selling down of the illiquid assets and, while unsurprising, this will be disappointing for investors.
‘With no timescale being given on how long this element is likely to take, investors should brace themselves for a long wait for the remainder of their money.’
Hughes said the fact the fund price will now only be updated weekly, as opposed to daily, shows that little is expected to change in the portfolio and that investors should watch the price carefully to see how it is impacted by any revaluation or sale of the remaining assets.
