Woodford fund remuneration: Investors are set to get a share of the £230m payout next year

Woodford fund remuneration: Investors are set to get a share of the £230m payout next year

Investors trapped in Woodford’s flagship fund, which collapsed four years ago, are due to receive a payout in early 2024.

More than 300,000 investors held around £3.7 billion in the Woodford Equity Income Fund when it closed in June 2019.

Today, fund manager Link Fund Solutions has written to investors setting out an estimated timeline for payment of compensation should the proposed compensation scheme come into effect.

Investors who suffered losses when Woodford's flagship fund collapsed will have to receive a payout in 2024

Investors who suffered losses when Woodford’s flagship fund collapsed will have to receive a payout in 2024

The £230m scheme announced by the FCA in April still needs to be approved by the majority of investors.

Next month, LFS will attend a court hearing seeking permission to call a meeting to vote on the proposals, which would allow the fund’s investors to accept or reject the offer.

Investors can vote on the proposals on December 4th. To pass, at least half of the investors, representing at least 75 percent of the fund’s value, must agree to the plan.

This also depends on the sale of Link’s fund solutions business to Waystone, which is expected to close next month.

If the plan is approved, the first tranche of the settlement, worth between 180 million and 200 million pounds, will be paid out in the first quarter of the year, Link said.

Link has set aside £50 million as a “reserve” from the distribution to cover certain unforeseen costs.

Link Group, the parent company of Link Fund Solution, will also voluntarily contribute up to £2.5 million towards costs associated with the scheme.

The FCA said it viewed the scheme as the “fastest and best chance of achieving a better outcome for investors”.

Ryan Hughes, head of investment partnerships at AJ Bell, said: “Investors will now need to think carefully about how they want to vote on the proposed plan, which will take place towards the end of the year.”

“The light at the end of the tunnel for investors is getting closer, but there remains a high probability that this will not be fully completed until mid-2024 at the earliest. Then five years will have passed since suspension.

“Investors have been extremely patient throughout this lengthy process, but hopefully they can truly see that there is an end in sight.”

Link said there was no need for Woodford investors to take immediate action and warned that Link, or on behalf of Link, would not contact them to make a claim under the plan.

Drew Weisholtz

Drew Weisholtz is a Worldtimetodays U.S. News Reporter based in Canada. His focus is on U.S. politics and the environment. He has covered climate change extensively, as well as healthcare and crime. Drew Weisholtz joined Worldtimetodays in 2023 from the Daily Express and previously worked for Chemist and Druggist and the Jewish Chronicle. He is a graduate of Cambridge University. Languages: English. You can get in touch with me by emailing: DrewWeisholtz@worldtimetodays.com.

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