Link Fund Solutions has defended an apparent £122m hole in the accounts of Neil Woodford’s former Equity Income fund as new analysis reveals how much investors are set to lose from its suspension and wind down.
The Times reports the maximum amount LF Equity Income investors will receive once the wind down of the fund is complete is £2.7bn, a billion less than the £3.7bn it held when it suspended in June 2019 and was still known as the Woodford Equity Income fund.
Already, £2.1bn was paid out to investors in January and a further £143m distributed in March.
See also: FCA accused of lacking bite as it fails to hold anyone to account for Woodford scandal
Accounts of former Woodford fund ‘mired in secrecy’
But The Times said after taking into account the £2.27bn that has already been distributed to investors there remains £122m missing from the fund’s latest official valuation of £444m. This was verified by AJ Bell, it said.
Link said the difference was due to asset and currency movements during the period assessed and assigning a new fair value for an asset, although it would not disclose details on the asset involved.
The Times described the dissolution process as being “mired in secrecy”.
LF Equity Income investors were last told of the fund’s full holdings on 30 June last year with Link securing permission from the Financial Conduct Authority to delay publication of any fund accounts. Most fund houses are required to do so twice a year.
Link told The Times one reason for not publishing the accounts was that valuations from the wind-up process were likely to be different from what an official auditor would conclude.
See also: Link accused of letting further middleman chip into Woodford investor savings
Mixed reports on when LF Equity Income fund investors will receive £220m payout
The Times also reported that fund investors may have to wait until December to get access to the cash from the £224m deal that saw Acacia Research sweep up 19 biotech holdings before flipping them for profit.
Evofem Biosciences is the latest stock revealed to have landed Acacia Research a healthy profit. Acacia Research sold the US listed company on the same day the Link transaction completed resulting in a net profit of £27.2m.
There are conflicting reports about when the cash netted from the Acacia Research deal will be paid out to investors.
The Times said it might not be until December that investors receive this money. However, This is Money reported that investors were set to receive an update from Link this week and a £200m payment shortly after.
See also: Woodford investors endure ‘another kick in the teeth’ as Synairgen quintuples
