Staff at Woodford Investment Management reportedly expected the suspended Equity Income Fund to reopen on schedule in December with £1bn of investor money sticking with the fund manager despite his poor performance and liquidity troubles repeatedly making headlines.
Portfolio Adviser understands the boutique fund house was caught off-guard by the Link decision to yank Neil Woodford as manager and wind down the fund.
Woodford learned of the decision on Monday afternoon with some senior members of staff also aware of the decision that evening. The rest of the company found out about the wind down in a meeting on Tuesday morning after the Link letter had gone public.
In July, Woodford had already confirmed there would be redundancies among support staff due to the Equity Income fund suspension and the subsequent falls in assets under management. Fund manager and fellow Invesco alum Saku Saha exited around the same time.
The loss of the £2.9bn fund, which has been handed to Blackrock and PJT Partners with immediate effect, is expected to put the firm in jeopardy. Its future as the manager of the Woodford Patient Capital Trust is in doubt and the Income Focus Fund now has just £252.9m assets under management, according to Trustnet.
Communication between Link and Woodford had reportedly broken down and the ACD had reportedly not been in contact with the manager for several weeks.
Woodford had been conducting roadshows in anticipation of the fund reopening, which was scheduled for December.
The firm was anticipating large investors such as Kent County Council and Hargreaves Lansdown would be pulling money from the firm as soon as the suspension lifted. Hargreaves in particular faces a tarnished reputation from its association with the fund, which it long championed through its Wealth 50 and the predecessor Wealth 150 buy lists.
But a number of IFAs with assets of approximately £1bn had pledged to stick by the fund, which is now simply known as LF Equity Income during its wind down period.
Woodford Investment Management said it would not be able to comment.
