The administrator overseeing Neil Woodford’s defunct Equity Income fund said almost £16m has been paid out in fees to BlackRock and other third parties to offload the remaining assets in the former flagship product.
It is almost exactly a year since Woodford, once the poster boy of the UK asset management industry, was sacked by fund administrator Link Find Solutions as manager of the Equity Income fund, culminating in his decision to close the door on his eponymous investment empire.
BlackRock, the US asset manager, has been responsible for selling liquid holdings in the Woodford fund, while PJT Park Hill has been tasked with offloading harder-to-sell investments made in unquoted companies.
According to annual report and accounts for the fund, published by Link on 30 September, BlackRock was paid £6.6m between 15 October 2019 and 17 January 2020. It has since earned another £3.3m in fees since the start of the year.
Ryan Hughes, head of active portfolios at AJ Bell, said:
“The latest update from Link does little to ease the pain for embattled investors stuck in the Woodford Equity Income fund with the news that the winding up of the fund could still be happening in another 12 months, meaning that over 2 years would have passed since the fund originally suspended.”
PJT Park Hill was paid £3.2m, while Debevoise & Plimpton, which provided specialist legal support to assist with the sale of unquoted assets, received £2.5m.
The fund, which at its peak in May 2017 managed £10.2bn in assets, shrunk to £3.7bn in June 2019, when Link took the decision to suspend it in order for Woodford to reduce his large exposure to unquoted stocks and reposition the portfolio.
After Woodford was sacked as manager, Link took the decision to wind up the fund and return money to savers trapped in the fund.
Investors have so far received £2.45bn since the first payments were made in January. Link said assets remaining in the fund now total £288m, made up of some of Woodford’s unquoted holdings including Atom Bank, Benevolent AI and Cambridge Innovation Capital. Link added that some of the assets may not be sold until “mid to late 2021”.
Hughes added: “Investors have also learned that they have had to shell out c£15.5m in fees to BlackRock, Park Hill and lawyer Debevoise & Plimpton to facilitate the selling down of the assets that will surely stick in the throat of all investors who have been waiting patiently to get some of their money back.
“Seeing such sums will make for painful reading for investors.”
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