The Financial Conduct Authority (FCA) has instructed Link Fund Solutions, the fund manager responsible for the Woodford Equity Income Fund (WEIF), to pay out up to £235m in redress to investors who suffered losses as a result of failures in liquidity management.
Over 300,000 investors were affected by the shortcomings of Link in managing the liquidity of the fund, which eventually led to its suspension in 2019. The FCA has determined that the loss suffered amounted to over £230m, and as such, Link has been ordered to make a significant redress payment to impacted investors.
The FCA has been closely scrutinizing the situation surrounding the WEIF since its suspension, and in particular, the role of Link in managing the fund’s liquidity. The regulator has made it clear that it is committed to ensuring that fund managers prioritize the interests of investors, and that failures in liquidity management will be met with significant consequences.
While the redress payment is a welcome development for impacted investors, there are concerns that it will take some time to be fully implemented. Link has indicated that it will need to sell assets within the fund in order to raise the necessary funds to make the payment, which could take several months to complete.
Overall, the