• Home
  • About
  • Subscribe
  • LATIF
  • Conferences
  • Dashboard
  • Edit My Profile
  • Log In
  • Logout
  • Register
  • Edit this post

Room 151

  • 151 BRIEF

    What's New?

  • John Turnbull elected president of the SLT

    May 12, 2022

  • Pension pool identifies biodiversity as a priority

    May 11, 2022

  • TfL latest to face credit-rating downgrade by Moody’s

    May 10, 2022

  • Government proposes ‘fairer, more accurate’ business rates system

    May 10, 2022

  • Queen’s Speech confirms planning reforms

    May 10, 2022

  • 18,000 affordable houses lost through ‘permitted development’

    May 9, 2022

  • Treasury
  • Technical
  • Funding
  • Resources
  • LGPS
  • Development
  • 151 News
  • Blogs
    • David Green
    • Agent 151
    • Dan Bates
    • Richard Harbord
    • Stephen Sheen
    • James Bevan
    • Steve Bishop
    • Cllr John Clancy
    • David Crum
    • Graham Liddell
    • Ian O’Donnell
    • Jackie Shute
  • Interviews
  • Briefs

Kent’s role in Woodford fund trading suspension unclear

0
  • by Colin Marrs
  • in 151 News · LGPS
  • — 4 Jun, 2019

A major equity fund suspended trading on Monday after Kent Pension Fund decided to withdraw its £263m investment.

Kent’s superannuation fund committee voted on Friday morning to withdraw from the Woodford Equity Income Fund fund with immediate effect, due to a drop in value caused by redemptions by other investors and weak performance.

However, Kent’s move was thwarted on Monday when the investment fund announced that it was suspending trading in the account for up to 28 days.

In a statement, the council said: “We do not know whether the decision to suspend trading was linked to the council’s decision to redeem.

“The council is committed to seeking the best outcome and could still seek a managed redemption in order to maximise the benefits for the pension fund.”

Kent County Council’s pension fund holds an investment of £263m in the Woodford Equity Income Fund, which was made in two tranches – £200m in 2014 and a further £60m in 2016.

This represents around 4% of the council’s total investments of £6.4bn within its pension fund.

In a statement, the council said that its investment with Woodford, had initially performed reasonably well, reaching a value of £317m in January 2017.

However, the performance has deteriorated, and the committee had resolved to discuss the allocation at its June meeting.

However, due to a further drop in the Woodford fund of £560m, the committee decided to act.

The committee resolved unanimously that the council should seek to redeem the investment with immediate effect.

However, on Monday, before the council was able to implement the decision, a statement from Woodford said: “Following an increased level of redemptions, this period of suspension is intended to protect the investors in the fund by allowing Woodford, as previously communicated to investors, time to reposition the element of the fund’s portfolio invested in unquoted and less liquid stocks, in to more liquid investments.”

Dealing in the fund was suspended by Link Fund Solutions, the fund’s authorised corporate director, to protect existing investors.

Woodford said it would keep investors informed about the suspension, including its likely duration.

Kent’s statement said: “The announcement on Monday that trading in the investment fund was suspended was not anticipated.

“Kent County Council is disappointed that, as a major investor in the fund, we did not receive this prior notification.”

Hargreaves Lansdown, a fund platform which previously promoted the Woodford fund, has now removed it from its Wealth 50 list of recommended funds.

In a statement, Hargreaves Lansdown said: “The fund has fallen in size over the last year, due to poor performance and investor outflows. The fund size is currently £3.7bn, down from £6.8bn a year ago.

“A significant reduction in fund size jeopardises manager Neil Woodford’s ability to run the fund effectively.”

Link will review the fund after 28 days and report to the regulator, after which the suspension will be lifted or renewed.

Investors who have a direct debit set up to automatically invest in Woodford Equity Income every month will have future payments held in cash until the issue is resolved.

Speaking on Radio 4’s World at One programme, former pensions minister Ros Altmann called for an investigation into the way the fund was sold and promoted.

She said a probe should make sure” there haven’t been untoward risks taken in the fund, which would have meant that there was too big a risk to investors in the fund than they had been told about.”

Get the Room 151 Newsletter

Room151 Conferences & Events

Share

You may also like...

  • LGPS: Lessons from pooling around the world—there’s good and bad news 25th Oct, 2021
  • Ryan Boothroyd: Post-covid world holds opportunity for long-term LGPS investors 28th Apr, 2021
  • Fixed income investing can help target both financial and sustainability targets 3rd Mar, 2021
  • 2022 LGPS valuations: options, opportunities and objectives 31st Mar, 2022

Leave a Reply Cancel reply

You must be logged in to post a comment.

  • Register to become a Room151 user

  • Latest tweets

    Room151 2 days ago

    ‘Urgent consultation’ issued in response to continuing audit delays: CIPFA and the Local Authority Scotland Accounts Advisory Committee (LASAAC) have announced another “urgent consultation” to consider proposals to address the latest issue that has led… dlvr.it/SQJ0kV pic.twitter.com/s6vw0bnGXO

    Room151 3 days ago

    Bags of capacity – now to housing delivery: HRAs have been freed up and councils are starting to invest, but some remain cautious, writes Steve Partridge. He suggests that a minimum of £10bn of additional borrowing could be[...] dlvr.it/SQDvxk pic.twitter.com/yZmoWzHv6U

    Room151 3 days ago

    Bags of capacity – now to housing delivery room151.co.uk/treasury/bags-…

    Room151 4 days ago

    To Michael Gove: a modest proposal: Conrad Hall has written an open letter to the levelling up secretary suggesting an unusual (and tongue-in-cheek) proposal to help councils predict next year’s government grant. Dear Secretary of State,[...] dlvr.it/SQ9GpX pic.twitter.com/mSX1xgeL8a

    Room151 4 days ago

    Queen’s Speech: an ambitious plan hampered by omissions: Richard Harbord examines the impact of the government’s legislative proposals on councils, and concludes that local authorities expect and need more from central government. However you view the… dlvr.it/SQ8hmP pic.twitter.com/BsnziyNPIO

    Room151 5 days ago

    Insights and inspiration from LGPS leaders past and present: Four current and former LGPS leaders have recently given powerful and insightful interviews as part of the Fiftyfaces podcast, which showcases inspiring investors and their stories. Hosted by… dlvr.it/SQ53lC pic.twitter.com/IRYMFPxdA2

    Room151 6 days ago

    Rate rise represents ‘fastest increase in borrowing costs in 25 years’: Partner Content: CCLA Investment Management’s Robert Evans analyses the rationale for the Bank of England’s latest rise in the Official Bank Rate and assesses the likely outcome of… dlvr.it/SQ33k3 pic.twitter.com/A81yiS1UgN

    Room151 6 days ago

    The Liability Benchmark, very much unloved at the recent Room151 treasury briefing, receives a much more positive assessment from Jackie Shute. There’s ‘no better tool for treasury portfolio management’, she says. #localgov #finance room151.co.uk/treasury/in-pr…

    Room151 6 days ago

    In praise of the Liability Benchmark: Jackie Shute responds to recent criticisms of the framework used to plan the future borrowing requirements of a local authority. I’m not suggesting that this debate will have the same[...] dlvr.it/SQ2cGf pic.twitter.com/4rqXTpHC9A

  • Categories

    • 151 News
    • Agent 151
    • Audit
    • Blogs
    • Business rates
    • Chris Buss
    • Cllr John Clancy
    • Council tax
    • Dan Bates
    • David Crum
    • David Green
    • Development
    • Education
    • Forum
    • Funding
    • Governance
    • Graham Liddell
    • Housing
    • Ian O'Donnell
    • Infrastructure
    • Interviews
    • Jackie Shute
    • James Bevan
    • Jobs
    • Levelling up
    • LGPS
    • Mark Finnegan
    • Net Zero
    • Private markets
    • Recent Posts
    • Regulation
    • Resources
    • Responsible investing
    • Richard Harbord
    • Risk management
    • Social care
    • Stephen Fitzgerald
    • Stephen Sheen
    • Steve Bishop
    • Technical
    • Transport
    • Treasury
    • Uncategorized
    • William Bourne
  • Archives

    • 2022
    • 2021
    • 2020
    • 2019
    • 2018
    • 2017
    • 2016
    • 2015
    • 2014
    • 2013
    • 2012
    • 2011
  • Previous story Ministry repeats business rates blunder despite tightened oversight
  • Next story Councils slam ‘misleading’ BBC reserves danger list

© Copyright 2022 Room 151. Typegrid Theme by WPBandit.

0 shares