When discussing over the summer the ongoing devastation of investing "legend" Neil Woodford, and the accelerating redemptions of the $4.7 billion Woodford Equity Income Fund, then a suspension of all redemptions, it sent shockwaves across the global asset management arena in June.
"I can't remember anything quite like this" said Peter Walls, veteran manager of the Unicorn Mastertrust fund, after trading in Woodford's fund was suspended. "I mean going back over decades really, there were quite a few funds that just didn't pick up the telephone and suspended dealing in the dark days of the crash of '87 and black Monday and all that but this is quite big stuff," he said in an interview with CityWire over the summer.
And now, the fallout and post-mortem begins: as Woodford has been fired from his equity fund and assets are to be immediately liquidated.
Link Fund Solutions (LFS), the administrator of LF Woodford Equity Income Fund, hired BlackRock Inc. to initiate a complete liquidation of the fund, according to a statement from LFS, reported Bloomberg.
Woodford rejected LFS' decision in a statement that read: "This was Link's decision and one I cannot accept, nor believe is in the long-term interests of LF Woodford Equity Income fund investors."
Link said the equity fund was frozen in June after a mass exodus of investors.
It could take BlackRock several months to sell the holdings of the fund as many of the investments are illiquid.
The fund is expected to incur significant losses upon the sale of all assets.
Investors might not be able to see any capital return by 1Q20. The exact amount of investors affected by the implosion of the fund is unknown, but hundreds of thousands of investors will likely be affected.
Woodford, the once star stockpicker, lost his magic touch several years ago, and ever since, the fund has experienced 22 straight months of investor withdrawals.
"We have seen the complete demise of the most famous fund manager the U.K. has seen for years," said Adrian Lowcock, head of personal investing at Willis Owen. "It will shake the funds industry to its core."
Lowcock said: "This collapse is on a par with the implosion of New Star at the height of the financial crisis."
Shares of Woodford Patient Capital Trust have collapsed 60% in the last nine months, and in the last several weeks, continue to hit record lows.