Woodford anyone?

Author
Discussion

DonkeyApple

55,326 posts

169 months

Tuesday 15th October 2019
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They seem to be talking about distributions in January. I don’t know whether that is meant to be when the first of a series will be made or if it is intended to be made in one go. Either way, it doesn’t leave much time to get everything away and as Woodford seems to have had a habit of taking chunky positions in illiquid equities and we are just a weeknor two away now from entering the Christmas slowdown and the thinning of the markets then what springs to my mind is that there could be some investment opportunities at play.

I wonder if it is worth looking at the equities that the fund holds and then looking at how the stock overhangs are impacting them and whether, if these are quality holidings, there is an opportunity to invest directly in them at potentially short term deflated values?

ferrisbueller

29,335 posts

227 months

Tuesday 15th October 2019
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BBC:
Woodfund fund falls 8%
Shares in Woodford Patient Capital Trust are now down 8% as trading gets underway in London to trade at around 34p.

That is after it was announced that the equity income fund run by Neil Woodford will be wound up and no longer bear Mr Woodford's name.



Seems anything bearing his name is going to be toxic.

K12beano

20,854 posts

275 months

Tuesday 15th October 2019
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DonkeyApple

55,326 posts

169 months

Tuesday 15th October 2019
quotequote all
K12beano said:
‘The less liquid assets "will continue to be sold over time in an orderly manner to seek to limit the loss of value which would be the key risk if they were sold on a forced or fire sale basis".

Link gave no timeframe as to when the winding up process would be completed.’

Anyone else getting the whiff of fees? It’s never brilliant when a timeframe is being managed by an entity that earns more the longer it takes. I assume there will be some form of investor oversight involved in the process though.

ferrisbueller

29,335 posts

227 months

Tuesday 15th October 2019
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DonkeyApple said:
I assume there will be some form of investor oversight involved in the process though.
Like there was for the fund itself.

Ah.

K12beano

20,854 posts

275 months

Tuesday 15th October 2019
quotequote all
DonkeyApple said:
‘The less liquid assets "will continue to be sold over time in an orderly manner to seek to limit the loss of value which would be the key risk if they were sold on a forced or fire sale basis".

Link gave no timeframe as to when the winding up process would be completed.’

Anyone else getting the whiff of fees? It’s never brilliant when a timeframe is being managed by an entity that earns more the longer it takes. I assume there will be some form of investor oversight involved in the process though.
Noticeable, naturally, that all the press spotlight is on Woodford. Yet, there can be no doubt that Link have - at best - had their eye off the ball here. Maybe if they had discharged their duties properly in the first place it would have not developed the way it did, but it's too easy for them to sit back and take their cut month after month!

And the regulator haven't been particularly quick in all this, being happy to watch all the people going round with big brooms now...... after all the mess has already occurred. But that's the nature of our regulatory system.

Mattt

16,661 posts

218 months

Tuesday 15th October 2019
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ferrisbueller said:
BBC:
Woodfund fund falls 8%
Shares in Woodford Patient Capital Trust are now down 8% as trading gets underway in London to trade at around 34p.

That is after it was announced that the equity income fund run by Neil Woodford will be wound up and no longer bear Mr Woodford's name.



Seems anything bearing his name is going to be toxic.
Almost half the NAV.

Surely a good opportunity there, as long as the holdings themselves aren’t toxic.

FredClogs

14,041 posts

161 months

Tuesday 15th October 2019
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Mattt said:
Almost half the NAV.

Surely a good opportunity there, as long as the holdings themselves aren’t toxic.
Depends how the NAV is being calculated and by whom.

DonkeyApple

55,326 posts

169 months

Tuesday 15th October 2019
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K12beano said:
Noticeable, naturally, that all the press spotlight is on Woodford. Yet, there can be no doubt that Link have - at best - had their eye off the ball here. Maybe if they had discharged their duties properly in the first place it would have not developed the way it did, but it's too easy for them to sit back and take their cut month after month!

And the regulator haven't been particularly quick in all this, being happy to watch all the people going round with big brooms now...... after all the mess has already occurred. But that's the nature of our regulatory system.
It might be because the practice of clouding the unlisted percentage by using inexpensive exchanges to pseudo list equities has become endemic within the industry to the point of being almost a norm, combining with the aspect that when one firm or individual becomes very powerful the judgement of those around them becomes softened?

I doubt Woodford is alone in creating funds that are less liquid in reality than the prospectus intimates.

anonymous-user

54 months

Tuesday 15th October 2019
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FCA announcement here, https://www.fca.org.uk/news/news-stories/update-lf...

Sounds as though winding-up the fund will painful for investors but I guess if people don't want to wait a long time for their cash there's not much alternative.

Link has been unable to reposition the portfolio into more liquid assets and they think reopening the fund would risk another suspension. Investors are likely to incur significant losses and any return of cash is not expected until next year.

Neil Woodford says, “This was Link’s decision and one I cannot accept, nor believe is in the long-term interests of investors”.

BoRED S2upid

19,705 posts

240 months

Tuesday 15th October 2019
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rockin said:
FCA announcement here, https://www.fca.org.uk/news/news-stories/update-lf...

Sounds as though winding-up the fund will painful for investors but I guess if people don't want to wait a long time for their cash there's not much alternative.

Link has been unable to reposition the portfolio into more liquid assets and they think reopening the fund would risk another suspension. Investors are likely to incur significant losses and any return of cash is not expected until next year.

Neil Woodford says, “This was Link’s decision and one I cannot accept, nor believe is in the long-term interests of investors”.
Not read the article but can’t another fund take it over? Probably at a huge discount so anyone still holding Woodford would then hold less of fundsmith (for example).

trickywoo

11,807 posts

230 months

Tuesday 15th October 2019
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BoRED S2upid said:
Not read the article but can’t another fund take it over? Probably at a huge discount so anyone still holding Woodford would then hold less of fundsmith (for example).
I'd guess nobody wants a poisoned chalice, unless its really, really cheap.

RL17

1,231 posts

93 months

Tuesday 15th October 2019
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Once the fund was closed for more than a couple of months trying to sell down unlisted and other illiquid investments and Woodford had a very bad name I can't see how it could survive as everyone still in was going to bale out as quickly as possible - like a run on banks when they are in trouble. (I sold in Jan 2017 - when it should have been clear to HL etc that he was losing his touch compared to other high profile managers).

So whole thing would have unravelled very quickly and some people would loose even more and the rapid selling would also have knock impact on the companies the fund was invested in. So winding up in an orderly manner must be best way.

jakesmith

9,461 posts

171 months

Tuesday 15th October 2019
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Wonder what he'll do now
Probably just manage his own money, maybe right back where he started


JulianPH

9,917 posts

114 months

Tuesday 15th October 2019
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The ACD really had no other choice.

The fund has been plummeting for a long time now and is down 25% over the last 6 months.

The vast majority of people were going to take their money out at the first opportunity in any event, so the closure creates a level playing field for all investors and gives time for the decent holdings to recoup and offset the illiquid losses (theoretically, at least).

A mass exodus would likely cause more damage than a controlled foreclosure.

Sad to see, but a resolute warning. If you don't understand why you are invested in something then you shouldn't be invested in it.



ooid

4,092 posts

100 months

Tuesday 15th October 2019
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DonkeyApple said:
.

I wonder if it is worth looking at the equities that the fund holds and then looking at how the stock overhangs are impacting them and whether, if these are quality holidings, there is an opportunity to invest directly in them at potentially short term deflated values?
Or short anything out there woodford has ever touched or got involved!

FredClogs

14,041 posts

161 months

Tuesday 15th October 2019
quotequote all
ooid said:
DonkeyApple said:
.

I wonder if it is worth looking at the equities that the fund holds and then looking at how the stock overhangs are impacting them and whether, if these are quality holidings, there is an opportunity to invest directly in them at potentially short term deflated values?
Or short anything out there woodford has ever touched or got involved!
I think Forterra is a very cheap share today.



anonymous-user

54 months

Tuesday 15th October 2019
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JulianPH said:
a resolute warning. If you don't understand why you are invested in something then you shouldn't be invested in it.
If I tried to understand what I was investing in before I invested in it I wouldn't be invested in anything at all! A bit of diversification can go a long way.

Some years ago and in another thread a poster made a splendid comment about J K Rowling's latest best-seller, describing it as "Harry Potter and the Triumph of hype".

Snap! "Neil Woodford and the Triumph of Hype..."

Hargreaves Lansdown will be away and clear from this mess but IMO they have a lot to answer for. They were softly pushing Woodford to Mr & Mrs Average for years...

BoRED S2upid

19,705 posts

240 months

Tuesday 15th October 2019
quotequote all
rockin said:
If I tried to understand what I was investing in before I invested in it I wouldn't be invested in anything at all! A bit of diversification can go a long way.

Some years ago and in another thread a poster made a splendid comment about J K Rowling's latest best-seller, describing it as "Harry Potter and the Triumph of hype".

Snap! "Neil Woodford and the Triumph of Hype..."

Hargreaves Lansdown will be away and clear from this mess but IMO they have a lot to answer for. They were softly pushing Woodford to Mr & Mrs Average for years...
Nothing wrong with a bit of hype the fund motored to over +20% based on hype alone as everyone threw money at him in the early days.

ferrisbueller

29,335 posts

227 months

Tuesday 15th October 2019
quotequote all
The other funds are closing too.