Investors in the now-closed Woodford Equity Income fund could be facing a further 12-month delay to receiving their money, the fund's administrator, Link Fund Solutions, said yesterday.
Link Fund Solutions' latest update also revealed investors were having to bear costs of £15.5m in fees for BlackRock, Park Hill and the law firm Debevoise & Plimpton.
One 1 September the fund's remaining assets totalled £288m yet Link Fund Solutions said it is "confident" of making a fourth distribution after a bulk of remaining assets are scheduled to be liquidated next month.
It is little relief that investors have got the bulk of the proceeds back, as taking until the end of 2021 to wind up the fund will incur significant additional fees."
Investors did receive a payment of £183m from the renamed fund, LF Equity Income, in August.
Ryan Hughes, head of active portfolios at AJ Bell, said the outlook for investors getting their money back is now highly dependent on the impact of covid-19: "The latest update from Link does little to ease the pain for embattled investors stuck in the Woodford Equity Income fund with the news that the winding up of the fund could still be happening in another 12 months, meaning that more than two years would have passed since the fund originally suspended."
"This is of course dependent on Link being able to offload the remaining £288m that they have confirmed is left in the fund which may be challenging given market conditions are being severely impacted by coronavirus," said Hughes.
Adrian Lowcock, head of personal investing at Willis Owen, described news of the extended delay as "shocking": "It is little relief that investors have got the bulk of the proceeds back, as taking until the end of 2021 to wind up the fund will incur significant additional fees."
"This incident has bought shame on the sector, and shone a spotlight on the resolution process for funds which fall into administration. Clearly it needs overhauling, as we cannot have a situation where investors are at the mercy of faceless 'administrators' who seem to be able to charge whatever they like for winding up the fund."
"Given this fund was often promoted as a core investment, suitable for investors of all types but especially those needing an income, there are people who can ill afford to have their money trapped for years."