Flagship Woodford fund to begin windup in January

Administrators on Friday announced that Neil Woodford’s Equity Income Fund (WEIF) will begin winding up on 18 January, with investors set to receive their first payout two days later.

A letter from Link Fund Solutions Limited (LFS) said that a final valuation of the fund's assets will take place a day earlier, while the initial capital distribution will be followed by more payments throughout the winding up process.

The fund has been suspended since June, when it ran out of cash to deal with a rising number of redemption requests.

Blackrock, which was assigned to sell off the WEIF's assets alongside Park Hill, has realised £1.65bn through asset disposals, or 79% of the value of Portfolio A and 56% of the value of the total fund.

The realised cash has been re-invested in FTSE 100 index instruments, money market funds, government securities and commercial paper with short maturity dates.

The administrator said Blackrock will continue to liquidate the remaining 21% of the WEIF portfolio assigned to it "in a way that safeguards value", with the remaining share being comprised of "less liquid stocks" than assets that have already been sold.

Meanwhile, Park Hill has not disposed of any of the "highly illiquid" contents of portfolio B and LFS said it was unable to confirm when these assets would be sold.

AJ Bell analyst Ryan Hughes said: "It’s likely that Park Hill, which is running the sale of these assets, has had offers but none that it deems acceptable. Link has also warned that the remaining 21% of the fund in more illiquid listed assets will also take a while to offload.

"Investors can take some solace in the fact that some of the assets that have been sold to date have been reinvested back into FTSE 100 trackers, so they will have benefited from some of the post-election bounce the index has seen so far today, however this is likely to be scant consolation."