Link Fund Solutions has updated shareholders stuck in Neil Woodford's LF Equity Income fund with news of a second capital distribution to be paid on or around 25 March.
So far, the sales of assets since the last distribution made on 31 January have generated an additional £141.7m as of 10 March, equivalent to 19.9% of the fund's assets at the time.
Based on this estimated total distribution amount, investors will have received a total of £2.3bn from the fund's assets being sold, with the next payment expected in their accounts on 25 March.
Investors will be acutely aware that a large portion of their investment remains trapped in the illiquid, unquoted holdings that Park Hill are trying to sell"
Meanwhile, Link has also decided to extend the accounting date for the fund from 31 December 2019 to 31 March 2020, but said this change will not affect the two scheduled income distributions.
In January, investors in the LF Equity Income fund were told they would receive 75.55% of the value of the assets of the fund in the first capital distribution, priced between 46p and 59p per unit they hold.
In a letter to investors, the fund's ACD announced that £2.2bn, equivalent to 75.55% of the value of the assets of the fund, has been generated through the sale of assets.
After removing costs, £2.1bn has been made available for the first capital distribution for the fund.
Costs include fees accrued during the wind up, outstanding costs for managing the fund and "estimated further funding and commitments in relation to investments of the fund".
The letter also noted that investors are due to receive a proportionate share of a regular income distribution totalling £9.2m on 28 February 2020 and of a special income distribution totalling £451,444 on 17 March 2020.
According to the initial letter explaining the process to investors on 15 October 2019, BlackRock's fees were to be taken out of the periodic charge paid to Link. However, as "BlackRock did not perform the same role" as Woodford, the ACD has decided it is more appropriate that the fees are charged directly to the fund, removing their own costs.
These fees, together with legal, audit and brokerage fees, were expected to amount to "around 0.2% of the fund's value at 17 January 2020".
Further brokerage costs have been incurred in the sale of assets in portfolio B, managed by PJT Park Hill, and were offset against the sale of assets in that portfolio.
The ACD had also confirmed the performance of the fund from 3 June 2019, the date it was suspended, until 24 January 2020 as -19.71%. The performance from 15 October 2019, the date of the decision to wind up the fund, until 24 January 2020, has been reported at -4.49%. The benchmark FTSE All-Share's performance over these periods were 9.65% and 6.5% respectively.
Investors in the fund, which operates nine share classes, will receive at least 46.36p for the ‘F Acc' version, and at most 58.99p for the ‘Z Acc' share class, the fund's ACD revealed on Tuesday (28 January). Readers can view the full breakdown in the table below.
The payment were to be made "on or around 30 January", with investors who hold the fund through a platform set to receive theirs "a few days after 30 January due to the time it may take for your platform to process your payment".
The payment equated to approximately 70% of the fund's total value, representing the liquid part of the portfolio that BlackRock has offloaded already.
Ryan Hughes, head of active portfolios at AJ Bell, said the news "represents the first day of closure for investors who have suffered from the terrible performance of the Woodford Equity Income fund".
However, he added: "While this payment of the first tranche of the liquidated assets will be a relief for thousands of investors who have been trapped in the fund since June, there is still huge uncertainty around the money still stuck in illiquid assets.
"Investors will be acutely aware that a large portion of their investment remains trapped in the illiquid, unquoted holdings that Park Hill are trying to sell. Selling the liquid holdings was the easy bit.
"For Park Hill, it is a hugely challenging task to sell the illiquid holdings in a timely fashion and investors still remain in the dark as to how long they will have to wait for the remainder of their money, and importantly, how much they are actually likely to get back."
This article was first published by Investment Week