The final chunk of investors’ money still trapped in the Woodford Equity Income fund is “almost worthless”, with any sale almost impossible as the UK heads into a deep recession, Adrian Lowcock at Willis Owen has said.
With the anniversary of the fund’s suspension on 3rd June just days away, the latest valuation figures suggest some £558m remains trapped in the fund.
While £2.3bn has already been paid out to investors, the remainder is invested in illiquid, unlisted investments.
These proved hard enough to sell during the bull market of 2019 but could be almost impossible to offload now, with the UK heading towards what could be its deepest recession in living memory thanks to the global pandemic.
“As we approach the first anniversary of the suspension of Woodford’s flagship fund, investors are wondering if they will ever get the rest of their money back,” said Lowcock.
“The bulk of the portfolio was sold in January and the money returned, which was good for investors – albeit scant consolation for the losses they incurred.
“However, what was always going to be more problematic was selling unlisted private equity investments, which were the reason Woodford got investors into this mess in the first place.”
Lowcock said the backdrop was acutely unfavourable now for anyone trying to sell these assets.
“These investments were hard to sell in 2019 but now in 2020, with the UK facing the deepest recession in history along with most of the rest of the world, that outlook has worsened.
“Holders of the fund may find that the remaining investments are almost worthless, and they may not get much back after costs on any further disposals by the fund.”
Adrian Lowcock, Chris Tuite
Head of personal investing Director & Head of Consumer Finance
Willis Owen MRM London
07849 846387 020 3326 9925
Notes to Editors
Willis Owen is one of the UK’s leading online investment service providers. Founded more than 20 years ago Willis Owen now has around £1bn of funds under management and has acted as an intermediary for over 150,000 customers and hundreds of millions of pounds worth of investments,
Willis Owen Limited is authorised and regulated by the Financial Conduct Authority.