Woodford Concerns

Malthusian

bowlhead99 wrote: »

My comment wasn't to suggest that he hadn't made some bad investments. Merely that when you are looking at things falling in value over a short time frame, there are generally also things going in the other direction. BCA seems to have been a solid investment - he bought 7% of it at IPO for 150p and yesterday's cash offer is over 240p, so a little over 12% annualised return in the 4.25 years since buying in.

With the amount he has lost, is losing and will inevitably lose, the only possible response to a 60% return is "whoop de doo". Woodford needs his successes to go full unicorn to make up for his failures, not generate a measly 60% on used car auctions.

AnotherJoe wrote: »

Well, its not so large now
Surely this fund is a dead man walking? If they take the gate off there will be a rush for the exits which will immediately put them back where they were in respect of 10% liquidity.

Correct. I said three and a half weeks ago when the fund suspended that wind-up was inevitable. (I'm not claiming to be a fortune teller, when I facetiously said I would bet a fiver I knew that no-one would ever have taken the other side.)

There are only two ways wind up can be avoided: either a) investors don't all rush for the exits or b) Woodford successfully sells off all the unlisted crap during the suspension period and makes the fund liquid again, and investors don't all rush for the exits anyway making the fund liquid but unviable to run. Both are unlikely.

The only reason it hasn't started winding up already is to maximise the period over which fees can be extracted.

Malthusian

gadgetmind wrote: »

Hmmm, another option would be to convert to close ended! The whole lot could be moved into a trust and those previously holding the OEIC units would be issues with shares.

Even if that was legally possible (it certainly can't be done unilaterally by Woodford IM), the result is that everyone rushes to the LSE to dump their shares and the shares swing to a massive discount, meaning that anyone who did successfully sell their shares would be worse off than if the fund had wound up and they'd received Net Asset Value (the actual NAV, not Crapita's hallucinogenic NAV).

It doesn't make sense for anyone - getting the bolt gun out and winding the pur beastie up is a better option.

Malthusian

If investors wanted to stick with Woodford that badly there is in theory nothing stopping them from forming a new investment trust with the express purpose of buying WEI's assets off it when it winds up.

People who wanted to stick with Woodford's vision would hold shares in the new trust, WEI would wind up and repay unitholders with the money from the investment trust, everybody gets what they want.

The difference between this and "converting" WEI is that you would temporarily need a load of spare cash to form the investment trust with (which WEIT holders would get back after their WEI units were redeemed), but if it's a viable concept that's not a real barrier.

If people really still believed that "early stage companies + Woodford + wait a long time = moon" then there's little stopping this from happening.

It won't happen of course because Woodford's star has well and truly crashed to the ground. There would be no interest at all.

fifer60

Updates from Link Fund Solutions Ltd, suspension extended:

Sorry I am not permitted to share URLs directly.

woodfordfunds-dot-com/words/blog/fund-suspension-extension/

woodford.linkfundsolutions-dot-co-uk/media/imiffr1y/lf-weif-draft-investor-letter-regarding-suspension-01-07-19-clean-lb.pdf[/url]

dividendhero

fifer60 wrote: »

Updates from Link Fund Solutions Ltd, suspension extended:

Sorry I am not permitted to share URLs directly.

woodfordfunds-dot-com/words/blog/fund-suspension-extension/

woodford.linkfundsolutions-dot-co-uk/media/imiffr1y/lf-weif-draft-investor-letter-regarding-suspension-01-07-19-clean-lb.pdf[/url]

https://woodfordfunds.com/words/blog/fund-suspension-extension/

https://woodford.linkfundsolutions.co.uk/media/imiffr1y/lf-weif-draft-investor-letter-regarding-suspension-01-07-19-clean-lb.pdf

There you go :money:

PS Sweepstake on when suspension lifted..my guess Feb 2020

AnotherJoe

dividendhero wrote: »

https://woodfordfunds.com/words/blog/fund-suspension-extension/

https://woodford.linkfundsolutions.co.uk/media/imiffr1y/lf-weif-draft-investor-letter-regarding-suspension-01-07-19-clean-lb.pdf

There you go :money:

PS Sweepstake on when suspension lifted..my guess Feb 2020

My guess is the 12th of Never. I think it will be closed down after a few more months, it's gone past the point of no return, whenever it opened (if it did) there would be massive redemptions either forcing another suspension or the fund getting so small it's not economic to run.
Only reason to reopen would be for Woodford to save face but an immediate wave of redemptions causing another closure wouldn't do that either.

Zola.

£60,000 a day he's making in fees alone, yet refusing to budge on the fees. I am sure he has costs to cover, but with all things considered he comes across as a total parasite.

Brian65

Yeah I think its pretty obvious that reopening the gates would create a stampede for the exit, so closing the fund and distributing the proceeds to investors would be the least worst option for investors. If Woodford won't do that the FCA should wake up and compell him to.
But then you could say the same for investment trusts that trade on a huge discount because the management has become a liability.
Problem is that when a fund closes the management loses face and stops getting its fees, so they want to keep it open.

Brian65

Zola. wrote: »

I am sure he has costs to cover,

Indeed .. There's the estate in Henley..Villa in Salcombe,, and hose racing stables to maintain :mad:

Reaper

Brian65 wrote: »

Yeah I think its pretty obvious that reopening the gates would create a stampede for the exit, so closing the fund and distributing the proceeds to investors would be the least worst option for investors.

I have a suspicion this might be what he is doing. If the market knew a large fund was selling everything off it would depress the value further. By pretending he is only doing a limited sell off he may get better prices.