The Neil Woodford ran Woodford Equity Income fund has been forced to halt withdrawals after experiencing a recent old-fashioned bank run style spate of redemption requests. Although it is not clear what caused the initial withdrawals
To come up with the cash at once, the fund would be forced into a fire sale, with the result that investors would almost certainly get back less – much less – than they put in.
The situation has been exacerbated by Woodford’s choice of investments – many of the public companies, like Kier, Circassia and Purplebricks, have turned out to be dogs, while about 10% of the fund is in non-quoted companies, whose shares are not listed on a public stock exchange.
Selling those shares can be difficult and time-consuming, so the fund has decided to stop the rot and end withdrawals. We do not know when they will resume; while the gates are up, the fund’s management will be scrabbling to raise cash.
Investment guru Neil Woodford stops investors withdrawing funds after Kent County Council sought £250m.
BBC News – Business
