Money: Woodford rejects calls to waive fees for suspended fund - PressFrom - United Kingdom

MoneyWoodford rejects calls to waive fees for suspended fund

16:05  11 june  2019
16:05  11 june  2019 Source:

Neil Woodford seeks to reassure investors after fund suspension

Neil Woodford seeks to reassure investors after fund suspension Redemptions from the fund were reported to have hit £10 million a day. The stock market guru insisted that his firm, Woodford Investment Management, has a strategy in place to stabilise the fund so holders would eventually be able to access their investments. It has been claimed major investors in the fund were given no prior warning that they would be banned from withdrawing their cash. Kent County Council, which attempted to withdraw £263 million invested in the Equity Income Fund, said it asked the company for its cash on Monday but within hours bosses suspended all withdrawals.

LONDON (Reuters) – Woodford Investment Management should waive fees to customers in its flagship fund while it remains suspended , a British fund manager Neil Woodford suspended trading in its Equity Income Fund on Monday after an increase in demand by clients to take back their

Nicky Morgan, chair of the UK parliament’s Treasury committee, has called on Neil Woodford to waive the fees on his crisis-hit fund for as long as trading is suspended . The move, by one of the most influential MPs overseeing the financial sector, heaps fresh pressure on the asset manager after he

Woodford rejects calls to waive fees for suspended fund © Reuters/Handout . Neil Woodford is seen in this undated handout picture

Neil Woodford's asset management firm said on Tuesday it won't waive fees for investors in its suspended flagship fund, rejecting calls from its regulator and lawmakers.

Woodford, among Britain's most famous fund managers, has faced fierce criticism after suspending his 3.7 billion pound equity income fund on June 3, in a rare move for a fund designed for retail investors. The fund has not given a date for reopening.

"The company will continue to charge the fee as the fund remains actively managed and we focus on repositioning the portfolio," a spokesman for Woodford Investment Management said.

Woodford in scramble to raise cash after devastating week

Woodford in scramble to raise cash after devastating week Neil Woodford’s wounded fund management empire has sold or transferred close to £600m of stock since the suspension of its flagship £3.7bn fund on Monday, as the one-time star UK stockpicker scrambles to raise cash. Signs that Mr Woodford is unwinding his long-held stock positions will heighten fears of a fire sale of assets in the funds, which have already weighed on share prices of companies across the portfolio as scrutiny intensifies of his firm’s recent conduct.

Woodford Investment Management has refused to waive the fee on its suspended flagship fund , Telegraph Money can disclose. Investors will continue to pay the fund ’s annual management fee , which is 0.75pc a year if the fund is bought via most investment platforms

Orders to trade in the fund placed after 1100 GMT last Friday have been rejected due to its suspension , leaving investors not knowing when they will get their Hargreaves said it would waive fees on its platform for investors in the suspended fund and called on Woodford to do the same.

Fees for the fund range from 0.5-0.75% of the assets under management, the spokesman said.

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Andrew Bailey, chief executive of Britain's Financial Conduct Authority, said earlier on Tuesday that he agreed with lawmaker calls for fees to be waived in the Woodford fund.

"He should consider his position," Bailey told BBC radio.

"From our point of view, we need him now to manage these assets more than ever. His job now is to get this fund back into a position where there can be orderly trading. He has his work cut out now," Bailey said.

The European Union's rule on funds limits so-called unlisted or illiquid holdings to 10%, dubbed the "trash ratio" by industry insiders.

"There is a way around that which he used, which is to take assets to another jurisdiction which can be deemed as eligible," Bailey said.

Neil Woodford firm ‘pleased’ with progress despite investor uproar

Neil Woodford firm ‘pleased’ with progress despite investor uproar Last week, Mr Woodford stopped people taking their money out of the Woodford Equity Income Fund. The City heavyweight suffered a nightmare week after suspending the fund “to protect investors’ interests” after they withdrew around £560 million from it over the previous four weeks. Woodford Patient Capital Trust has said it believes it “continues to have the potential to deliver attractive returns”, despite the subsequent slump in share value. Susan Searle, chairwoman of Woodford Patient Capital Trust, said: “The board is closely monitoring the situation and is engaging with its shareholders and advisers.

Image copyright Woodford Investment Management. Image caption Neil Woodford apologised to investors earlier this week for suspending Mr Woodford , one of the UK's best-known stockpickers, suspended his largest fund this week after rising numbers of investors asked for their money back.

The fund was forced to close its doors when it was unable to meet investors' demand to withdraw their money due to its exposure to illiquid assets. Mr Woodford confirmed to Telegraph Money that he would not waive his fee on the suspended fund despite investors being locked out. He is estimated to be

"Around about 20% of the Woodford Fund was in unquoted assets. A bit under 10% was held in Britain, and about 11% was moved to another jurisdiction. That was within the rules," Bailey said.

Four of the Woodford equity income fund's investments were listed in Guernsey in the last three years, allowing the fund to classify them as listed.

"That's allowable under the rules. I don't think it is right. Investors should be able to determine where their assets are held," Bailey said.

He said there is no fixed term for a suspension of a fund, which can be a useful "safety value".

Video: Woodford has long road to recover after fund suspension: Fund manager (CNBC)

Investors will get their money out when the fund has been put back in a condition where it can operate in an orderly fashion, he said.

Neil Woodford under pressure from City watchdog over fund fees

Neil Woodford under pressure from City watchdog over fund fees Financial Conduct Authority boss Andrew Bailey said Mr Woodford should ‘consider his position’ on charging fees for his suspended fund.

When does a darling become untouchable? A maverick become a liability? Investors learnt the answers to these questions the hard way this week when “superstar” fund manager Neil Woodford was forced to suspend trading of his eponymous Equity Income fund after he was unable to meet the demand

The fund may be suspended , but it’s still being actively managed. However, on Thursday, Nicky Morgan, chair of the Treasury select committee, asked Woodford to waive the fund ’s fees while it was suspended . Hargreaves Lansdown will waive its platform fee for the time being.

"The worse thing in my view for investors is for there to be a disorderly fire sale of assets, which would, of course, destroy value for them," Bailey said.


British fund supermarket Hargreaves Lansdown, a major Woodford backer, picks out a number of funds it considers to be among the best value for its ‘Wealth 50’ list.

Bailey said that in general, "We look at how funds construct these best buy tables.

"They should be impartial, make sure it's done promptly, in the sense of up to date.

"We will look at these again to ensure they and others have abided by those principles."

Hargreaves' shares, which have fallen 15% since the Woodford fund suspension, were down 0.5% at 1118 GMT.

Woodford Patient Capital Trust, the firm's only listed fund, bounced 7.8% in a move which traders described as "technical" after a drop of 20% over the past five trading sessions.

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