Woodford Concerns

Thrugelmir

talexuser wrote: »

More Borisgraph hype today:
"Some say they will no longer be able to retire as planned after the Woodford Equity Income fund tanked following its suspension in June. It is now in the process of being wound up."
That's a good idea, put all your retirement planning into one super performing fund and hope it goes up forever, and do nothing when it goes south.

Diversification "what's that"? Are people simply greedy or lazy. The basics of investing are enshrined in stone. Ignore them at your peril.

jimjames

atush wrote: »

They also said WPCT is being wound up

One news report was very misleading on that. If WPCT is being wound up I would believe that it must be approved by shareholders as unlike a fund they are the owners of the company

https://www.bbc.co.uk/news/business-50061968

But on Tuesday evening, in a further announcement, he said he would abandon the last two funds, Income Focus and Woodford Patient Capital and close his investment management business.

Another report I read was even more sloppy with their wording

bowlhead99

jimjames wrote: »

One news report was very misleading on that. If WPCT is being wound up I would believe that it must be approved by shareholders as unlike a fund they are the owners of the company

https://www.bbc.co.uk/news/business-50061968

But on Tuesday evening, in a further announcement, he said he would abandon the last two funds, Income Focus and Woodford Patient Capital and close his investment management business.

Well, the BBC report says as the headline that he is closing his empire, and then in the first sentence explains that they mean he is quitting the remaining funds, and in the next sentence it explains he was sacked from the big one and will quit the other two, and in the following sentence it says his business will be wound down.

By the time we get to your quoted text, it's made clear that what is meant is that he is 'abandoning' those two funds, and it's his investment management business that will close.

The two funds (income focus and patient capital) will still exist, they will just not be managed by him, after his management company has served its notice as their manager.

Once they (the Woodford fund management company) fulfil 'our fund management responsibilities to WPCT and LF Woodford Income Focus' they will 'close the company in an orderly fashion' (the Woodford fund management company).

I guess if you read the words in these articles and take them literally you will get what's going on (especially if you are reading threads like this or the actual press releases and FAQs from the various parties), but there will no doubt be some people who didn't particularly take an interest before seeing a press headline and fear the worst/unknown for their holdings.

Another report I read was even more sloppy with their wording

Yes, the Times for example have an article penned by their 'Financial Editor' last night with the headline "Investors expect to lose 50 percent". The article explains that the investors will receive the first winding-up payment before the end of Jan and can expect to receive additional payments, probably over several years.

They say that Link declined to put any numbers or further timetable on the return of funds but that given the majority is now in liquid FTSE100/250 stocks that can be sold easily, "it is expected that investors could get at least 50% of the value of their investments, as they are then valued, as their first instalment".

Commenters on the online version of the article have said things like "your article says investors should get at least 50% in the first instalment, not lose 50%, you should change the headline because it is too alarmist". But the paper is not going to change headlines because they are too busy off writing the next of their several Woodford or HL articles per week.

AnotherJoe

So, BH, which way would you vote on closing WPCT ? As I read it as a shareholder you get a say ? Yours could be the swing vote

talexuser

Income Focus has now been closed to prevent run on its assets.

Reaper

talexuser wrote: »

Income Focus has now been closed to prevent run on its assets.

That happened yesterday, see 1327 above

AnotherJoe

talexuser wrote: »

Income Focus has now been closed to prevent run on its assets.

Now that the person most responsible for running the assets down is gone, is that necessary?

Davy_Jones_II

I’d not paid a huge amount of attention to Woodford. I work in finance, so am aware of the story, but I just assumed he’d taken “normal” higher risk positions and called it wrong.

Reading on here that he put money into a cold fusion scam puts a very different slant on things. Maybe he knew full well he was buying magic beans, but assumed the next person would pay even more, but even that is as dodgy as hell.

AnotherJoe

Davy_Jones_II wrote: »

I’d not paid a huge amount of attention to Woodford. I work in finance, so am aware of the story, but I just assumed he’d taken “normal” higher risk positions and called it wrong.

Reading on here that he put money into a cold fusion scam puts a very different slant on things. Maybe he knew full well he was buying magic beans, but assumed the next person would pay even more, but even that is as dodgy as hell.

There are several things he did that skirt the edge of legality but go way over ethically. Whether the toothless and inept FCA will investigate those, I doubt.

atush

bowlhead99 wrote: »

'They', whoever is meant by that, would have to announce it to the market as it would be price sensitive.

Last news from the trust itself yesterday was simply that Woodford was resigning from being manager of it and that they were in discussions with other groups:
https://m.londonstockexchange.com/exchange/mobile/news/detail/14267276.html

When a new group comes in to manage it, one of the options would be to go into run-off mode, with an aim to sell off holdings or portfolios of holdings to secondary private equity buyers with a plan to ultimately break it up and liquidate it. Another would be for some group to make a cash offer to buy out holders at some discount to NAV but premium to prevailing price, and write off or sell off stuff on their own timescale away from public markets. Another would be for it to be kept on as a going concern charging commercial fees.

Investor appetite for any of that stuff depends on the 'quality' of the investor base. As they are largely retail (as institutions / FoFs have been selling out) they will not necessarily want to be 'patient' and wait around for anything to come to fruition - and might vote through anything requiring a vote that looks like it would get them a bit more than the price they could get for themselves by selling out on the stock exchange.

It was on the bbc website. maybe they made a mistake but they said all his funds/trusts were closing