Woodford Concerns

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

atush

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.

Another report I read was even more sloppy with their wording

Yep thats the one i read

bowlhead99

atush wrote: »

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

atush wrote: »

Yep thats the one i read

As I mentioned in post 1340, their wording was not as clear as it could have been but if you read it word for word, they said he was quitting as manager of the funds/trusts. They still exist; it's his management business that will close once it no longer has management responsibilities.

Only WEIF so far is officially going to be put into liquidation in January, following the statutory 3 month minimum period from informing the investors.

Income Focus is temporarily gated as a knee-jerk reaction from Link to prevent problems caused by a potential knee-jerk reaction from investors seeking an exit. Link fear a 'rush for the exit' due to the fact investors know the current manager is leaving it but don't know who will take it over; and that the fund is holding some assets which the WEIF product is holding in parallel for which WEIF will be a heavy seller which could depress prices; and may be confused by the press reporting about what types of assets are held and what is closing and what isn't.

WPCT continues with the manager serving notice and new one not yet appointed, but is not an open-ended fund so investors cannot frustrate the investment strategy by redeeming their position - they can only sell on the market. The market for WPCT shares is of course weak; among other things, WEIF will now definitely need to sell its 9% holding in due course because of its own liquidation. As of a couple of days ago, Link Fund Solutions - rather than Woodford Investment Management - is now named in WPCT's filings as the controller of the 9%.

That's a big overhang of supply even if there were not already plenty of other reasons for people to want to sell WPCT. I have no plans to sell mine, but may pause the plan to buy more over the coming weeks (the first tranche of which I bought a week ago, a couple of business days before Woodford was fired by WEIF and decided to close up, oops).

Aretnap

bowlhead99 wrote: »

As I mentioned in post 1340, their wording was not as clear as it could have been but if you read it word for word, they said he was quitting as manager of the funds/trusts. They still exist; it's his management business that will close once it no longer has management responsibilities.

I agree that if you read the BBC report closely enough the information it's the management business that he's closing rather than the funds themselves is in there - it doesn't explicitly say what's happening to the funds other than that "administrators are considering all options". But I also think that anyone who doesn't read it closely, or who isn't aware of the distinction between the management company and the funds themselves (which let's face it, is most of the likely readers), would come away with the impression that WIF and WPCT are also closing as well as WEIF. So I think it was reasonable of jimjames to use words like "misleading" and "sloppy" to descrice the wording.

AnotherJoe

Bh for your own good please stop snatching at that falling knife. you are going to cut your hands to ribbons and it's not going to be pretty.
For your own sake consider if you have anchored on the NAV when it was around 60p, and still believe that to be a true reflection of its worth, when actually all signs point to it being considerably lower than even the current price. Link have a record of very poor decisions, They got fined £66M in their previous incarnation as Capita for exactly this.

Mark Steward, Executive Director of Enforcement and Market Oversight at the FCA said:

“Consumers are entitled to expect that authorised firms will carry out their responsibilities under our Principles for Businesses with care and diligence. These responsibilities are paramount and in this instance CFM failed badly.

Plus of course we know for a fact they've been both duped on the value of some companies and been way off on others, and completely missed financial issues at others, it's not as if all this should be a surprise.

Or are you in fact a step ahead of the game and looking long term, reckoning that you buy at say 30p and eventually get 60p, perhaps 2/3 of that via Link, when their complete incompetence is eventually exposed? If so a dangerous and cunning game but fair play to you. Whether LInk have enough money to pay this, or are insured enough, I have no idea

talexuser

The vultures circle.

The borisgraph today reports top city lawyers stand ready to sue Woodford on behalf of investors. So as well as losing money in the fund, you can give more money away to expensive QCs to lose more money for a tiny chance of recovering a tiny bit more.