Investors in Neil Woodford’s defunct Equity Income fund will be hit by winding up costs of at least £10m, according to the fund’s administrator, with a further £22.5m needed to honour funding promises made to young companies backed by the former star manager.
Link Fund Solutions said on Wednesday it had already paid £5m for transaction fees, brokerage costs, legal and audit fees over the past three months and had estimated additional costs for these services of £5.34m.
BlackRock and PJT Partners, Paul Taubman’s boutique bank, were appointed last year to sell the assets left in the fund, which had been frozen to investor withdrawals since June following an investor exodus and chronic underperformance. Other service providers to the fund include auditors Grant Thornton and Northern Trust, the US depository bank.
The wind-up costs heap further misery on Mr Woodford’s investors, who were told on Tuesday they faced losses of at least a fifth on the bulk of their holdings. Link on Wednesday said the value of the fund had fallen by 19.7 per cent between its June suspension and January 24. Over the same time period, the FTSE All-Share rose 9.65 per cent.
The £10m fees come on top of the £13.8m Mr Woodford and his business partner, Craig Newman, extracted from the company as dividends in its final financial year, which brought the total reaped by the pair since 2014 to £112m.
Further losses are expected as PJT Partners attempts to sell the fund’s hard-to-sell assets.
Investors are due to receive their first repayment from the busted fund on Thursday.
Kent county council pension fund, which had £263m tied up in the fund, said it had been informed by Link that it would receive an initial repayment of £138.9m.
Investors were hit by another blow later on Tuesday as Rutherford Health, a cancer therapy company in which Mr Woodford was a big investor, called in a £7.5m cash commitment from the Equity Income fund. Mr Woodford, who invested in the business across his three main funds, agreed to buy Rutherford shares for £80m in cash when the company floated last year.
The fund was forced to plough £15m into the company, formerly known as Proton Partners, in December. The final £10m of the original commitment is outstanding. Equity Income now owns 26.8 per cent of the business, but is restricted to just 19.5 per cent of its voting rights.
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