LONDON (Reuters) – Trading in Neil Woodford’s 3.7 billion pound ($4.69 billion) Equity Income Fund may not be reopened swiftly after it was suspended on June 3 because of the illiquid assets it holds.
The fund’s authorized owner, Link Fund Solutions, must update investors on whether it intends to keep the fund closed to trading at least every 28 days. The first deadline is July 1.
Reason - Trading - Time - Fund - Stakes
The main reason trading was suspended was to allow time for the fund to sell its stakes in unlisted and illiquid assets. This is also the main factor determining when it can reopen.
Woodford had been trying to sell those stakes before the suspension. His plans included moving five holdings into his listed Woodford Patient Capital Trust (WPCT) in a March share swap. But redemptions outpaced that effort.
Britain - Markets - Financial - Conduct - Authority
Britain’s markets regulator, the Financial Conduct Authority (FCA), said at the time of the suspension that a fifth of the fund’s assets were in such illiquid assets.
The illiquid assets include preference shares in four firms listed on the Guernsey stock exchange that have never traded.
FCA - Data - Fund - %
FCA data show how difficult it will be to reopen the fund quickly, indicating that just 8%...
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