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Woodford suspend trading on the Equity Income fund

Woodford Investment Management has agreed in conjunction with its authorised corporate director (ACD) Link Fund Solutions (LFS) to suspend trading on the Equity Income fund amid an "increased level of redemptions".

A statement posted on the Woodford IM website said the fund would be suspended from issuing, cancelling, selling, redeeming or transferring shares within the fund with immediate effect for at least 28 days.

The move is "in the best interests of all investors in the fund" and will protect the investors in the fund by allowing manager Neil Woodford, "as previously communicated to investors, time to reposition the element of the fund's portfolio invested in unquoted and less liquid stocks, in to more liquid investments".

This follows reports last week the Woodford Equity Income had seen its total assets fall by £560m to under £3.8bn in less than four weeks as investors exited Neil Woodford's flagship fund amid a sustained period of poor performance. However, it was a request from Kent County Council to withdraw £250m that led to the suspension, BBC News reported.

The Financial Conduct Authority (FCA) was quoted by BBC News: "The FCA is aware of this situation and in contact with the firms involved to ensure that actions undertaken are in the best interests of all the fund's investors."

Woodford have released the following statement

LF Woodford Equity Income Fund (a sub-fund of LF Woodford Investment Fund, an Investment Company with Variable Capital) (the "Fund")

'Link Fund Solutions Limited ("LFS") as the Authorised Corporate Director of the Fund, has today obtained the agreement of the Funds' Depositary to suspend dealing in shares in the Fund, with immediate effect and until further notice.

After consideration of all relevant circumstances relating to the Fund's assets, we have, in conjunction with Woodford Investment Management Limited ("Woodford"), the appointed Investment Manager, come to the conclusion it is in the best interests of all investors in the Fund to suspend the issue, cancellation, sale, redemption and transfer of shares in the Fund.

Following an increased level of redemptions, this period of suspension is intended to protect the investors in the fund by allowing Woodford, as previously communicated to investors, time to reposition the element of the fund's portfolio invested in unquoted and less liquid stocks, in to more liquid investments.

During the period that share dealing is suspended no requests to redeem, purchase or transfer shares in the Funds will be accepted. When LFS elects to resume dealing in the shares of the Fund, we will write to all investors informing them of this fact.

We will keep all investors appropriately informed about the suspension, including its likely duration.

N.B. Trading in the LF Woodford Income Focus Fund, Woodford Patient Capital Trust and other segregated mandates is unaffected by this suspension'.

We at Elson are in contact with Woodford and will be keeping up with the latest news available on this subject. We would advise our clients that there is no cause for alarm, as stated this has been done to protect existing investors. Please revisit our website for the latest updates on Woodford.

If investors have any questions regarding the suspension of dealing and wish to speak to someone at Woodford, please call 0333 300038 or alternatively email them at info@woodfordfunds.com.

If you wish to speak to us please contact us here.

- uploaded - 4 June 2019

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Elson Associates does not offer advice as to the suitability of investments. If you are unsure whether an investment is suitable for you, you should obtain expert advice. Past performance of an investment is not necessarily a guide to its performance in the future. The value of investments or income from them may go down as well as up. You may not necessarily get back the amount you invested.

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