Woodford fund suspensions

Since the fund began winding up on 18 January 2020, the NAV has been published weekly. However, the ACD has decided that following the publication of the weekly indicative NAV on 26 August 2020, it will now be published monthly. The monthly NAV will be calculated and published on the final business day of each month, as of 30 September 2020. 

The ACD took this decision as the majority of the assets have been sold, and as the assets that the fund continues to hold are, by their nature, mostly valued on a periodic basis (rather than by reference to the price obtained from a listing on a stock exchange).  You can read more detail about the NAV in the from 29 July 2020.

Link Fund Solutions, the Authorised Corporate Director (ACD) of the LF ASI Income Focus Fund, decided to suspend this fund (then known as the Woodford Income Focus Fund) because it believed the resignation of the fund's manager, Woodford Investment Management, would result in redemptions reaching a level that would leave it unable to meet those requests without prejudicing the interests of both remaining and redeeming investors.

The ACD expects to provide an update on progress shortly, with a date for when it expects to resume dealing in the fund.

Link Fund Solutions, the Authorised Corporate Director of LF Equity Income Fund (previously called the Woodford Equity Income Fund), is closing this fund by selling the assets and returning the proceeds to investors.

Woodford Investment Management is no longer the investment manager of this fund, and Link has divided the fund’s assets into two portfolios: one of listed assets and a second made up of unlisted and certain highly illiquid listed assets.

BlackRock is managing the first portfolio ahead of the fund being wound up. During this period, BlackRock is selling assets and using the proceeds to purchase money market funds and FTSE 100 index instruments. Values will fluctuate with market movements.

PJT Partners, which was appointed by Link to assist in the sale of illiquid assets, has taken charge of the second portfolio that contains the unlisted and certain highly illiquid listed assets. Together with the ACD, it is continuing to explore opportunities to sell these assets while maximising returns for investors.

The ACD decided to close the fund because although Woodford was repositioning the fund’s assets during the suspension, progress was too slow to keep the fund on track to re-open in December 2019, and the ACD was uncertain when this repositioning would be fully achieved.

It therefore concluded that it would be in the best interests of investors for the fund to be wound up on the basis of an ‘orderly realisation’ of the fund’s assets.

The closure has now been approved by the FCA.

The ACD is selling the assets in the fund and returning the proceeds to investors as a series of capital distributions. This means that the number of shares that you hold in the fund will remain the same, but the price per share will reduce to reflect the value paid out of the fund on the date of each capital distribution.

A capital distribution occurs when the host fund – in this case the LF Equity Income Fund - is being wound up and an “orderly realisation” of the fund’s assets is made to the fund holders. In this instance, the remaining funds are paid out via capital distribution payments. These are lump sums which are paid as cash directly into investors' accounts.

The value of this capital distribution will depend on the number of shares held by each investor. Following the payout, investors will continue to hold the same number of shares in the fund, but the value of them will be correspondingly lower, to reflect the fact that money has been paid out.

If you receive a capital distribution payment to a SIPP account, then please note that you cannot withdraw that payment unless you are over 55. If you are over 55 and withdraw it, then this will constitute a crystallisation event. For more information, please visit our pensions and retirement page.  

Link started winding up the LF Equity Income Fund on 18 January 2020.

Payment of the first capital distribution has been paid to customers, and is now available for reinvestment or withdrawal, or can be left as cash in your account until you decide what to do with it. Payment of the second capital distribution is pending.

Link Fund Solutions is the Authorised Corporate Director of the LF Equity Income Fund (previously called the Woodford Equity Income Fund) and the LF Income Focus Fund (previously called the Woodford Income Focus Fund).

An ACD is authorised by the Financial Conduct Authority and is the head of a fund’s board of directors, with full control of it.

No.

Over the 12 months leading up to the suspension, significant numbers of investors wanted to sell their shares in it. This proved challenging for the fund manager, because the portfolio contained a number of investments that were unquoted or illiquid, meaning they are hard to sell at short notice.

No. Woodford Investment Management is no longer the investment manager of the LF Equity Income Fund. The ACD divided the fund’s assets into two portfolios, one of listed assets and a second made up of unlisted and certain highly illiquid listed assets.

BlackRock is managing the first portfolio, selling its assets and using the proceeds to purchase money market funds and FTSE 100 index instruments until they are then sold and the proceeds paid to investors.

PJT Partners, which was appointed by Link to assist in the sale of illiquid assets, has taken charge of the second portfolio, which contains the unlisted and certain highly illiquid listed assets.

No. The LF Woodford Equity Income Fund is expected to commence winding up on 17 January 2020. Its assets will be sold and any proceeds will be returned to investors, as cash into existing accounts, which is then available for reinvestment.

You will only be able to sell your investments in the LF Woodford Income Focus Fund if and when the suspension on that fund is lifted.

The LF Equity Income Fund share price will continue to change every day, to reflect the value of the investments it holds. Changes in the value of your investment during this time will be a result of market movements, coupled with changes to the investments held in the fund. You will be able to see the up-to-date value of your investment if you log in to your account.

The price per share will reduce on the date of each capital distribution to reflect the value paid out of the fund on that date.

If you have dividend payments from the LF Equity Income Fund paid straight out to your bank account, you will receive them as normal.

If you have a withdrawal plan that involves selling shares in this fund, we will not be able to do this. If there is not enough cash in your account to cover your income payment, we will sell some of your investments in a different fund. We will do this in line with any instructions you have given us with your withdrawal plan – typically, it will mean selling some of your largest fund holding by value. 

If the LF Equity Income Fund is the only fund you have with us, and there is no cash in your account, we may not be able to make a payment to you, though we will send you any dividends from the fund that have arrived in your account as cash. 

If you have dividend payments from LF ASI Income Focus Fund paid straight out to your bank account, you will receive them as normal.

If you have a withdrawal plan that involves selling shares in this fund, it will resume automatically.

We will collect your direct debit payment as usual, and any money that would usually have been invested in this fund will remain in your account as cash. This applies to ISAs, Investment Accounts and pensions.

You can select an alternative fund for your RSP by logging into your online account and amending your chosen funds.

If you invest through your RSP in funds other than the LF Equity Income Fund, then we will make those investments for you as normal.

We will collect your direct debit payment as usual, and any money that would usually have been invested in this fund will remain in your account as cash. If you wish to resume regular investments into this fund then you can set up a new Regular Savings Plan online to pay into it online; just log in to fidelity.co.uk and go to the 'Manage your plan' section under Regular Savings Plan to choose this fund again.

No. It will not be possible to buy shares in the LF Equity Income Fund, so we cannot reinvest any dividends you receive.

If you have asked us to reinvest dividends from this fund, the payments will stay in your account as cash and will be available for you to invest in a different fund. This applies to ISAs, Investment Accounts and pensions.

Since the fund was suspended on 15 October 2019, all dividends have been paid into cash. As the fund reopened on 13 February 2020, you now have a decision to make. You can either reinvest in this fund, invest in a different fund, or continue to hold your dividends in cash. If you’ve already asked us to reinvest, this would have been carried out to any dividends paid from this fund after noon on 12 February 2020. This applies to ISAs, investment accounts and pensions.

Woodford Investment Management has announced that it will cease its role as portfolio manager of the Woodford Patient Capital Trust in January 2020.

The Board of Woodford Patient Capital Trust has confirmed that Schroder Investment Management will take over the Woodford Patient Capital Trust by the end of the year.

The investment company will be renamed Schroder UK Public Private Trust plc. There will be no change to the company's existing investment objective and policy. 

The trust remains open for buys and sells. Any regular savings plans paying into - and regular withdrawal plans redeeming from - the trust will continue as usual.

Link Fund Solutions and Woodford Investment Management have not placed any restrictions on dealing in Woodford Patient Capital Trust, and it is still available through Fidelity.  As an investment trust, it is a different type of investment from the LF Equity Income Fund and LF ASI Income Focus Fund. Its shares are traded between investors on a secondary exchange. This means the fund manager does not have to dispose of holdings because an investor has decided to sell shares.

This will depend on how the transfer is being carried out:

• If it is a ‘re-registration’ (in other words, your shares are simply being moved from one platform to another without being sold), then this is usually postponed about two weeks before the capital distribution, and starts again after the distribution has been paid. This will be the case whether it is a re-registration to or from Fidelity.
• If the transfer involves selling shares in either fund and moving the proceeds as cash, this will no longer be possible. In a case where shares in the fund were sold before dealing was suspended, the proceeds can be moved as cash, either to or from Fidelity, but it will not be possible to reinvest them in the fund.

If money from a transfer goes into your Fidelity account as cash, you have the option of leaving it as cash, moving it into other investments, or withdrawing it.

This will depend on how the transfer is being carried out:

• If it is a ‘re-registration’ (in other words, your shares are simply being moved from one platform to another without being sold), the transfer can go ahead as planned, whether it is to or from Fidelity.
• If the transfer involves selling shares in either fund and moving the proceeds as cash, this will be possible where we receive the instruction after noon on 12 February 2020.

If money from a transfer goes into your Fidelity account as cash, you have the option of leaving it as cash, moving it into this investment or other investments, or withdrawing it.

This will depend on how the transfer is being carried out:

• If it is a ‘re-registration’ (in other words, your shares are simply being moved from one platform to another without being sold), the transfer can go ahead as planned, whether it is to or from Fidelity.
• If the transfer involves selling shares in either fund and moving the proceeds as cash, this will no longer be possible. In a case where shares in the fund were sold before dealing was suspended, the proceeds can be moved as cash, either to or from Fidelity, but it will not be possible to reinvest them in the fund.

If money from a transfer goes into your Fidelity account as cash, you have the option of leaving it as cash, moving it into other investments, or withdrawing it.

Our service fee covers all the services we provide, such as producing valuations, factsheets, customer communications and statements. We have to continue providing these services when dealing in a fund which is suspended. As a result, we will not be waiving the Service Fee in relation to investments in LF Equity Income Fund or the LF Woodford Income Focus Fund.

Yes. The ACD has disclosed the fees paid from the fund prior to - and following - the start of the winding-up period, which began on 17 January 2020.  No annual management charges have applied to the fund after 18 January 2020, though other charges were applied to pay the companies that were engaged in relation to selling the assets.

You can read the official statement for more details.

There may be a capital gains tax implication if you receive a disbursement from a fund that you hold in an Investment Account. Where we have sufficient information on your investment we will provide a separate written communication on how to calculate any gain or loss. For generic information please see the .

You can find out how much you've received in any disbursements by logging in to fidelity.co.uk and checking your transaction history. If you hold investments in an investment account, then you will receive further information in your Annual Tax Voucher, which we usually generate at the end of April. To view this, you will need to to your online account, select 'Documents & messages' from the top of the page and then 'Documents'.

If you need more information on how to treat any capital gains tax, please speak to a tax adviser.

Come back to this page. We will update it as soon as we have any further news.