Hada little read up on the Woodford issue and its more interesting than I thought.For those that are not familiar with the Neil Woodford LF income Fund it'sdiscussed here. Citywire
To summarise, as the fund administrator it closed the 3b GBP fund in 2019 andproceeded to liquidate the assets. It paid back 2.25b GBP in 2021 and still hadsome minor assets. Some of the contention is that some assets were sold at fire saleprices by LF under direction from Link and the statements by Acacia Researchlit this torch and that the fund was closed either prematurely or too latewhich resulted in abnormal profits for some and avoidable losses to the otherinvestors. The closure related to fund liquidity and is further complicated byseveral technicalities involving what seem to be tax havens.
Thecommentary also indicates that NW had a bit of a following. This may have beena concern for Link as the administrator. There is commentary that the market value of the fund wasinflated by the following buying up the on market what they could whilst some large long term placements were by their nature illiquid and thus frozen. The value of these frozen assets seems to be at the heart of issue as their ultimately realised value contributed to the loss. The value was progressively marked down in the wind up of the fund as they proved difficult to sell. The value of these was always the responsibility of LF. Link are firm in their view that they always acted in the best interests of all investors so it remains to be seen what happens. The reality is that the fund was making speculative investments.
Thisguarantee would seem to limit on the liability if indeed one exists. It goes tothe central issue of duty of care and due diligence. Clearly Link believe thatLink were compliant but people lost money hence the litigation and the 3 yearinvestigation by the British FCA.
