Fund payout

Woodford investors share £235m compensation

Neil Woodford

Neil Woodford’s star lost its shine

Investors who were casualties in the collapse of a fund led by a one-time star stockpicker will share out £235 million in compensation.

Woodford Investment Management collapsed in 2019 after attracting more than £10 billion of savings from hundreds of thousands of small investors on the back of his track record.

There was a severe change of fortune as he switched focus from publicly-quoted stocks to higher-risk unlisted equities and began using unorthodox measures to keep within liquidity rules.

Many investors withdrew their money – more than £500m in a four week period – and in June 2019 the Woodford Equity Income Fund was frozen. It was later closed and is being wound up.

The fund administrator, Link Fund Solutions, had a responsibility to ensure that the fund was being managed with appropriate levels of liquidity and risk, and that all investors were treated fairly.

The Financial Conduct Authority said Link had made critical mistakes in managing its liquidity.

It has now been agreed to compensate more than 300,000 investors who expect to receive about 77p in each pound they invested.

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