Link Fund Solutions (LFS), the authorised corporate director of the collapsed Woodford Equity Income fund (Weif), has been put up for sale by its Australia-headquartered parent company, Link Group.
The move, announced on 20 October, comes just weeks after Link Group’s acquisition by Canadian firm Dye & Durham fell through. This was due to the Financial Conduct Authority hitting LFS with a £50m fine and demanding that up to £306m be set aside as a redress charge for investors still trapped in the Woodford fund.
At its height, Weif held around £10bn in investor assets, before dwindling down to roughly £3.5bn by the time it was gated in June 2019. Investors have watched from the sidelines in horror as the value of the holdings shrivelled. Between 15 June and 30 September 2022, the fund’s value dropped from £118.6m to £79.9m, with many investors losing a considerable sum of money despite recent capital distribution payments.
There was likely widespread disappointment after the sale of Link Group to Dye & Durham collapsed, as it offered the UK watchdog leverage in that it would not greenlight the deal unless the £306m was set aside and the £50m fine paid. The decision to offload LFS effectively gives the FCA a second bite at that particular cherry.
That’s not to say that a payout to beleaguered Woodford investors is guaranteed. The settlement procedure is ongoing, according to a Link Group statement on the ASX, and with LFS continuing to dispute the FCA’s charges, a sale seems unlikely until a resolution can be reached.
Portfolio Adviser approached the FCA for comment, which responded only that it remained in discussions with LFS and Link Group.
See Also: Woodford investors take aim at Hargreaves Lansdown
