Woodford Troubles Continue


We never had any of Mr Neil Woodford’s investments but have been buying his old Investment Trust since and now hold 6million shares.  They are up over 50% from their low though we didn’t buy them all at that price sadly but we did chase them down there!

However, we criticised some of the things Mr Woodford had been doing – before the troubles were terminal (though we understand why investors and advisers could have had holdings with him and the past was much better) but we have also criticised even more how the liquidators have done their best, it seems, to make a bad job even worse.

Last week it was announced that Link’s agreed discounted sale of a £224million portfolio of unquoted healthcare investments sold on 5 June has been majorly turned-over by 18 June and on-sold at a significant premium to what was paid.  Recently Link also sold a chunk of the old Investment Trust at a give-away price too and it still has another chunk to go (and that overhang has held back the price on the market).

Why were investors not given the opportunity, say, of being allocated shares in a new investment pot, either including the old Investment Trust shares or two pots?  That way, no losses would have been realised and the underlying investors could have decided when they wanted to sell, either immediately or at their choice later (as Link is a registrar so it would have been easy simply to add new lines to the existing register holdings).  Indeed, they could also have done this with the main chunks of funds rather than liquidating all the assets in a fire sale at the end of last year/early this year when the market knew exactly what was going to be coming along so stacked the prices against it.

This would still have closed-down the old funds (and in a timely fashion) but would have given the control of what happened next over to the underlying investors.  Instead, they really have been sold down the river and adding insult to injury, without the cash available of late to reinvest at bargain-basement levels too.  And don’t forget too – there will have been a feeding frenzy no doubt of corporate costs and liquidation fees suffered by the poor investors as well.