Neil Woodford refreshes portfolio with fire sale while investors ponder future of suspended fund
Ahead of an expected update on the suspension of his flagship fund, Neil Woodford has reportedly raised £459 million from share sales across his portfolio of funds, Citywire reports.
The investment management firm is holding some of it in cash while putting the rest to use in other stocks, a spokesperson told Bloomberg — which counts at least £300 million ($379 million) in sales from the frozen Equity Income Fund. Selling off illiquid or unlisted assets is key to Woodford’s turnaround mission for the fund, which was suffering from an exodus of investors that shrunk the fund from £10.2 billion to £3.7 billion in two years and squeezed its ability to meet any further redemptions.
“We haven’t disputed the Citywire or Bloomberg stories, but we do not provide confirmation of every sale or stock bought by Woodford,” a spokesperson told me in response to a query. “The decision on suspension is made by Link, the ACD for the fund, and I believe they are planning to make an announcement later today.”
Link Fund Solutions is technically the “authorized corporate director” that delegated Woodford’s firm to manage its funds.
After abruptly notifying investors that they would not be allowed to redeem, sell, transfer or cancel their shares in the Woodford Equity Income Fund for at least 28 days, Woodford explained that he needed the time and resources to rebalance the portfolio. Today marks the end of that four-week timeframe.
Through public filings and data, Bloomberg found that since disclosing the drastic measure in June, he has sold shares in BCA Marketplace, NewRiver REIT and Oakley Capital Investments, among other positions.
On top of that, he’s also offloaded stakes in Mereo Biopharma, e-Therapeutics and Sensyne Health, according to Citywire. Some sales had apparently come from the Woodford Income Focus Fund, which is still open and has lost investors despite Woodford’s best efforts. The Patient Capital Trust is also exploring sales after trading down almost 30% on the London Stock Exchange, in part to help cut borrowing.
Days ago, UK financial regulators say they are now taking a hard look into the suspension of the Equity Fund. How Woodford managed the liquidity of the fund will likely be the center of the Financial Conduct Authority’s scrutiny.
As investors anxiously await an update, the Times is reporting that Link plans to continue the suspension indefinitely because they deem the Equity Fund unprepared for the flood of expected redemption requests.
We will be watching for the official release when it drops.