Neil Woodford’s track record on the Woodford Equity Income fund has weakened his claim that Link has failed to act in the best interests of unitholders.
The fallen star fund manager clashed with his former authorised corporate director in a statement issued shortly after Link confirmed its decision in a letter to shareholders on Tuesday morning.
“This was Link’s decision and one I cannot accept, nor believe is in the long-term interests of LF Woodford Equity Income fund investors,” said the equities manager.
But the fund manager’s statement is weakened by his track record on the £2.9bn fund, said Shore Financial Capital director Ben Yearsley.
“With the fund closed and investors not being able to access their money it’s irrelevant what Neil thinks of long term value and interests of investors.
“Investors bought into a daily dealing fund and because of where Neil chose to invest, the fund hasn’t been able to deal for over four months now on a daily basis. If the fund wasn’t able to reopen by Christmas this was clearly one of the only options open to Link.”
Woodford Equity Income investors have lost 27.7% over the last year and 35.9% over three years, AJ Bell figures show. The Woodford Patient Capital Trust has faced even bigger losses down 54.6% over one year and 59.2% over three years.
In an analyst note on the future of the Woodford Patient Capital Trust, JP Morgan Cazenove said the wind-up is likely to disappoint shareholders.
But it said a December reopening, which had been the original plan, likely would have seen the fund flooded with redemptions and would have prejudiced investors who were slower off the mark. “In our view a liquidation is the fairest way forward,” JP Morgan Cazenove said.
However, Chelsea Financial Services managing director described the situation as a “mess” and said he wasn’t sure it was in the best interests of investors.
“Link suggests that investors will get their money back faster than waiting for the fund to reopen, but I’m not convinced that is the case – December had been earmarked for a re-opening of the fund,” McDermott said.
