The Neil Woodford saga is a stain on the investing industry.
Launched in June 2014, the Woodford Equity Income fund was the most heavily promoted fund in the history of UK asset management. Its manager was described as “Britain’s Warren Buffett”.
But returns were very poor. In June 2019, after several large withdrawals by big investors, trading was suspended.
Hundreds of thousands of investors — many of them customers of Hargreaves Lansdown — have lost substantial sums of money. They still don’t know how much of their money they’ll get back, or when they can expect it.
The wheels of justice turn very slowly in the asset management world, but there are hopeful signs that Woodford investors will start to see some legal redress in the next few months.
The Evidence-Based Investor is pleased to announce the launch today of a new campaign called #JusticeForWoodfordInvestors.
We are going to be providing regular updates on the various legal actions currently being planned, and we will explain to affected investors the different options open to them.
We are also joining forces with the London-based law firm Harcus Parker, which is working on a collective claim against Link Fund Solutions, the fund’s Authorised Corporate Director (or ACD).
All that's wrong with the industry
Commenting on the launch of #JusticeForWoodfordInvestors, TEBI’s founding editor Robin Powell, said:
"The Woodford scandal embodies all that's wrong with the asset management industry.
"All sorts of third parties have profited from the Woodford Equity Income fund, its huge popularity, and then its demise and the resulting fire sale. These include administrators, analysts, brokers, platforms, media outlets and other asset managers. Not to mention Neil Woodford himself.
“But the people who trusted the fund with their savings have lost substantial sums of money — and there’s still no end in sight. It’s time for investors to claim what’s rightfully theirs. That’s why we’re launching this campaign, #JusticeForWoodfordInvestors."
Several guilty parties
“There are several guilty parties in this sorry episode and there are a number of legal actions in the pipeline. TEBI will be keeping a close eye on all of those actions, and offering our support where we think it appropriate.
“For now we are focusing on helping Harcus Parker to recruit claimants for its collective action against Link Fund Solutions.
“As the ACD for the Woodford Equity Income fund, Link had a fiduciary responsibility to investors in the fund. It had a duty to ensure that investors’ money was being sensibly invested, and that investors could redeem their shares on request. That clearly didn’t happen.
“We believe that the action Harcus Parker is bringing presents Woodford investors with an excellent opportunity to seek the redress they deserve.”
Claim to be filed "very soon"
Damon Parker, Partner at Harcus Parker, said work on the action is progressing well, and it's hoped a claim will be filed in the next few weeks.
"We have set out our clients’ case in pre-action correspondence and are now preparing to file the case at court," he said. "We have a specialist team of leading barristers who have advised on the merits of the case and we have funding in place. We expect to file our clients’ claim at court very soon.
"Link, as the Authorised Corporate Director, was responsible for the day-to-day management of the Woodford Fund. This included ensuring the fund was sufficiently liquid at all times and that investments were fairly valued. Our clients will say that Link failed to fulfil its responsibilities to all fundholders.
"We are confident that we have a strong case and have invested substantial resource in the case on that basis."
Risk of losing out
Although other law firms are working on different Woodford-related claims, Damon Parker said investors are at risk of losing out if they do not join this particular action.
He said: "If the case were to settle, or if the court were to make an award for damages, only those who have signed up as a claimant would benefit. Typically the terms of settlement in a case of this sort would be confidential and so they would not assist other investors in a follow-on claim."
WOODFORD INVESTOR?
If you hold, or have held, shares in the LF Equity Income Fund (formerly the LF Woodford Equity Income Fund) (the ‘Woodford Fund’) either directly, through an intermediary or in your SIPP, you may be entitled to claim for compensation.