Woodford Investment Management Fund Suspension Update From Neil Woodford
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[Woodford Investment Management Fund Suspension Update From Neil Woodford]
WHY HAVE YOU TAKE THE DECISION TO SUSPEND REDEMPTIONS?
[Neil Woodford:] Source: LYBIO.net
As difficult a decision as this is and clearly frustrating for you, our investors – we felt that this was necessary to protect your interests.
The situation that we confronted was that we were seeing a loss of outflow in the portfolio. As a result of that increased level of redemptions, What we were seeing was the stock market, in a way, anticipating the fact that we would have to be sellers of stocks to meet those redemptions. And we felt the prices that we would be able to achieve in order to meet those redemptions would be disadvantageous for our investors.
COULD YOU EXPLAIN EXACTLY WHAT THE FUND SUSPENSION MEANS?
So fund suspension means that there is no inflow or outflow into the Woodford Equity Income Fund. But fundamentally the strategy remains the same. Investors money is preserved in the assets in which we’ve invested. And the portfolio continues to work for our investors.
WHAT HAPPENS NEXT?
So the suspension provides us with the time to execute the strategy that we’ve communicated to our investors. And just to remind you, that strategy is about reducing the fund’s exposure to illiquids and
unquoteds, down to zero. That process is underway and is continuing, but was made obviously much more difficult by the outflow that we were witnessing. So the suspension of dealing in the funds enables, us gives us the time and space, if you like, to execute that strategy, to reduce our exposure, and redeploy that capital into more liquid stocks in the FTSE 350, but primarily in the FTSE 100, that fit in with my core strategy, but which are more liquid and more conventional, if you like.
IS IT JUST THE EQUITY INCOME FUND THAT IS SUSPENDED?
So it’s important to stress that the suspension applies only to the Woodford Equity Income Fund. The focus fund is open as normal to buying and selling. It’s a different portfolio. It doesn’t have any exposure to illiquid or unquoted securities, and consequently isn’t exposed to the same issues that the Woodford Equity Income Fund is. And it’s positioned, I believe, for the economic and market environment that we’d like to see over the medium and long term.
WHEN CAN INVESTORS NEXT EXPECT AN UPDATE?
[Neil Woodford:] Source: LYBIO.NET
We will be providing regular updates on the fund. We will price the fund daily. So investors will have a clear idea of what’s happening in the fund. So again, I’m extremely sorry that we’ve had to take this decision. We will keep our investors informed. We will use this time to reposition the fund in the way that we said.
We understand our investors frustration. All I can say in response to that, of course, is that this decision was motivated by your interests, our investors. When it is appropriate, we will open the fund so you can buy or sell as normal.
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