Ryan Hughes, head of active portfolios at investment platform AJ Bell, comments on the latest letter to investors in the Woodford Equity Income fund:
“News that progress has been made in the sale of 19 companies, representing around half of the remaining assets by value to Acacia Research will be cautiously welcomed by investors as it moves them one step closer to being able to draw a line under this sorry situation.
“However, there will no doubt be huge frustration at the valuation achieved by Park Hill, which has been managing this process, given the valuation may be lower than other offers that had reportedly been received and rejected previously. This highlights the very real problem of being a forced seller with all potential purchasers knowing that Park Hill and Link were in no position to try and push the price higher. At the end of the day with such illiquid stocks, these assets are only worth what someone is prepared to pay for them.
“Ultimately, the challenge for Link has been to find a balance between getting a fair price for the assets and the time taken to achieve this. Given one year has already passed since the initial suspension, I’m sure many investors will feel like this has dragged on long enough and it is time to finalise the winding up of the fund – even if it does mean taking yet another hit on the value of their original investment.”