Mail Online

Four years on... and Woodford’s investors are still left in limbo

THIS Saturday will mark the fourth anniversary of the suspension of high-profile investment fund Woodford Equity Income, run by Neil Woodford. The fund was suspended because it didn’t have sufficient cash to meet the flood of redemption requests from investors as its performance dipped alarmingly.

It will be a far from happy occasion for the 300,000 plus investors who have been patiently waiting to be compensated for the losses they suffered as the £3.4billion fund – awash with illiquid assets – was subsequently broken up and the holdings (most of them) sold off.

Although the Financial Conduct Authority has hardly covered itself in glory with its probe into the circumstances behind the fund’s shuttering, there is now a whiff of compensation on the horizon. But it’s far from certain. In a deal struck with Link Group – the owner of the business whose role was to ensure Neil Woodford stayed on the straight and narrow – compensation of up to £235 million could be paid to investors.

Yet it’s not a slam dunk, there are many hurdles to clear, and, as the FCA said last month, it will still leave Equity Income investors with losses of at least 23pence in the pound.

One investor who has taken a keen interest in the Woodford debacle from day one told me last week that he would be amazed if anything like £235million comes back to investors.

He also believes the regulator has not devoted enough resource to holding to account other organisations involved in the Woodford debacle – namely, investment platform Hargreaves Lansdown which recommended Equity Income as a best buy right up until it was suspended; and, of course, Neil Woodford and for that matter, the FCA itself.

(In the regulator’s defence, it has said its investigations into ‘other parties’ is continuing and that it will ‘consider any further failings which may have negatively impacted investors’.)

The investor says he is not holding his breath waiting for the FCA to conclude matters. His view is that someone like Dame Elizabeth Gloster should be brought in to sort out the mess. It was Dame Gloster who was asked to investigate the FCA’s regulation of investment bond issuer London Capital & Finance which collapsed in 2019 owing more than £240million to 14,000 investors. Following her work, which took 18 months to complete, compensation was promptly paid to those caught up in the financial scandal.

Woodford investors deserve compensation soonest. They’ve waited far too long. If the FCA can’t get it over the line, a mover and a shaker like Dame Gloster should be asked to bring it about.

Wealth & Personal Finance

en-gb

2023-05-28T07:00:00.0000000Z

2023-05-28T07:00:00.0000000Z

https://mailonline.pressreader.com/article/282759181044683

dmg media (UK)