Link Fund Solutions has suspended the Woodford Income Focus fund as Neil Woodford steps back from the strategy.
In an update to investors on Wednesday, Link, the fund’s authorised corporate director, said it has obtained the agreement from Northern Trust Global Services, the fund’s depositary, to suspend share dealing from 15 October until further notice.
The announcement comes after Woodford Investment Management (WIM) informed Link on 15 October that it will resign from its role as manager of the fund. This followed the announcements that the Woodford Equity Income fund is to be wound up and that Woodford Investment Management is to close.
Link said as a result of the manager quitting it expects Income Focus to reach a point whereby it may no longer be able to continue to meet redemption requests without prejudicing the interests of both remaining and redeeming investors.
It said: “After consideration of all relevant circumstances relating to the fund’s assets, LFS has come to the conclusion that it is in the best interests of all investors in the fund to suspend the issue, cancellation, sale and redemption of shares in the fund.
“The period of suspension is intended to protect investors from this anticipated increased level of redemptions in the fund. The ACD considers that, as a ‘forced seller’ of its assets to meet redemptions, the values received by the fund for such assets might be adversely impacted and the Fund might not receive full value from such sales.”
Link said it will consider options including appointing an alternate investment manager, a scheme of arrangement into another fund or a winding-up of the fund.
It added Woodford has committed to continue to work collaboratively with LFS in its capacity as the appointed investment manager of the fund.
Link and Northern Trust will formally review the suspension at least every 28 days and will inform the FCA of the outcome of that review and any change to the information given to Shareholders.
However, LFS expects to write to investors with an update within the next 14 days.
