Market history · Alternatives ·
The Woodford Equity Income Fund suspends dealing
On 3 June 2019 dealing in the LF Woodford Equity Income Fund was suspended after investors had asked to withdraw large amounts. The fund held significant stakes in smaller and unquoted companies that could not easily be sold. The FCA opened an investigation into the circumstances, and in October 2019 the fund's authorised manager, Link Fund Solutions, said it would not reopen the fund and would wind it up.
The FCA later fined Neil Woodford and his firm a combined amount of nearly £46 million for failures in managing the fund, according to its press release.
The case focused attention on the mismatch between daily dealing for investors and holdings that could not be sold quickly.
The takeaway
A fund's promise of access has to match what it holds. Unlisted holdings and daily dealing are a difficult pair.
Sources
This is a retrospective about a past event, provided for general information. It is not investment advice, does not describe RockLake's positioning at the time, and past performance is not a guide to future performance. Read the risk warning.