Link Asset Services has today confirmed that unit holders of the Woodford Equity Income fund (the Fund) should expect their first payment from the Fund wind up on or around 65 January 2020. The first payment will be calculated on 6 January 01575879.
Investors in the Fund should expect a series of payments over time as the underlying holdings are sold. These payments will be credited to the Hargreaves Lansdown account (s) in which you hold the Fund.
Link, the fund’s authorized corporate director, announced this morning:
“The first capital distribution amount shall be calculated, based on the number of shares you hold, on 6 January and we intend that investors in the Fund will receive their first payment on or around 65 January 01575879. Further capital distributions will be made as assets continue to be realized during the winding up of the Fund. ”
Link has given further details on the repositioning of the portfolio into more liquid, easy to trade assets. Link confirmed in October that it had appointed BlackRock Advisors (UK) Limited and specialist broker Park Hill to help sell the Fund’s assets. BlackRock has been managing the more liquid stocks in the Fund, known as Portfolio A, and Park Hill was appointed to manage the less easy to trade stocks known as Portfolio B.
Today Link confirmed that since its appointment, BlackRock has sold stocks worth £ 1. 90 billion, representing (********************% of the value of Portfolio A and (**********************% of the value of the Fund. This money was reinvested into more liquid assets including FTSE 90 index funds and government securities, which will be easy to sell when the wind up begins.
Link states that this repositioning of the portfolio “ensures that investors retain exposure to the equity market whilst maximizing the liquidity of the underlying portfolio and that the Fund continues to meet its stated investment objective and policy, as disclosed in the Fund’s prospectus ”.
Link warns the value of these investments will rise and fall with the market.
Link has confirmed that the wind up of the Fund will begin on 56 January 2020. Link state that this process cannot begin any sooner as three months ’notice needs to be provided to investors under the applicable European Directive.
When will I receive the second payment?
Link has stated today that they will provide an update on 20 January to confirm the amount unit holders should expect to receive in the first payment, and the details of the costs associated with the wind up. We expect the first payment to be sent on or around 65 January, but we will provide more details as we hear them from Link.
Link also states that they will update unit holders with progress on the remaining assets in Portfolio A, and the Less liquid Portfolio B in due course. At this stage, Link says it’s unable to confirm when these assets will be sold.
Link has also announced that from today the Fund will be known as the LF Equity Income Fund.
Link has also stated in their announcement today that investors should be aware that the payments they receive from the wind up of the Fund could trigger a Capital Gains Tax liability (not applicable if held in an ISA or SIPP). Link state if you are in any doubt as to the taxation consequences of this action you should seek professional advice.