Investors who had money stuck in Neil Woodford’s collapsed Equity Income fund are set to receive some cash back in the first quarter of next year.
Link Fund Solutions has issued a letter to investors announcing details of a proposed Scheme of Arrangement which will ultimately return some capital to them.
If the scheme goes ahead, Link estimates that the total fund will be up to £230m.
The first distribution from the fund is estimated to be between £180m and £200m and is expected to be made as soon as the first quarter of 2024.
Link has set aside £50m as a ‘reserve’ from the distribution to cover certain cost contingencies.
A vote will be held to approve the scheme on 4 December. It requires 50% or more of investors to back it in order to become effective from 18 December.
The firm said it believes the scheme offers the best available outcome for Woodford investors as it provides for the maximum amount possible to be paid, and sooner than would otherwise be the case.
Investors should receive a letter on the scheme via the platform or broker through which they originally invested.
A Link spokesperson said: “Launching the scheme is a positive step forward in settling claims and reaching a position where investors in the fund at the point of suspension can receive payments.
“The purpose of the settlement with the FCA is to draw the matter to a close for these investors as efficiently as possible, and we believe the scheme is the best outcome available – given all of LFSL’s available assets will be put into the settlement fund. Link Group will also make a voluntary contribution of up to £60m that will not be made if the scheme does not become effective. Link Group is also voluntarily contributing up to £2.5m to the costs of the scheme.”
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