Investors whose money is trapped in the failed Woodford Equity Income fund will have to wait until next year before they get all their cash back.
They had previously been told that the remaining assets may be returned by the end of this year.
Link Fund Solutions, which is in charge of the fund, suspended withdrawals in June 2019 when it was valued at £3.7 billion. It took the decision to fire the manager, Neil Woodford, and dissolve the fund in October that year.
Investors have been receiving money in tranches as the underlying assets are sold off. Since January last year they have received £2.54 billion. There is £123.57 million left under management in the fund, now called Equity Income, meaning the total that investors will get back is £2.66 billion, £1 billion less than the fund’s value when it was suspended.
The fund was once one of Britain’s most popular retail investment products, worth more than £10 billion at its peak. It was promoted by financial advisers and investment platforms for years on the back of Neil Woodford’s previous track record.
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Woodford got into trouble in 2017 by investing in small, high-risk biotechnology companies that were unlisted, so difficult to sell. As performance slowed, investors withdrew their money, meaning that Woodford was forced to sell assets to pay them back. The more difficult to sell firms that remained therefore constituted a larger proportion of the fund.
Link said it hoped to sell the investments by next year but was seeking the best price so did not want to rush any sale. Investors will be updated by the end of November.
