23 September 2019: Fund suspension update

Link Fund Solutions Limited (Link), the Authorised Corporate Director of the LF Woodford Equity Income Fund has formally reviewed the suspension of the fund. Link previously indicated that it was anticipated that the suspension of dealing is likely to last until early December 2019 while the portfolio of assets held by the fund is re-positioned. Link have decided that it remains in the interests of all investors for the suspension of dealings to continue.

Read the announcement from Link

We are very sorry for the continued suspension and understand the concern it will be causing investors. We remain fully committed to getting the fund into a position that delivers the best possible outcomes for our investors – for those who wish to withdraw their money from the fund when it reopens and for those who wish to stay.

Progress is being made to reposition the fund into a much more liquid portfolio. To date, 84% of the proceeds from share sales made to reposition the portfolio since the suspension have been reinvested in FTSE 100 companies. As the fund’s interim report to 30 June 2019 highlights, these include new investments into FTSE 100 companies, British American Tobacco, BT and IAG.


During the latest 28-day period, which covers much of September, the fund has underperformed in relative and absolute terms. A primary reason for the underperformance was the downward revaluation of Benevolent AI, a UK-based healthcare company that uses artificial intelligence for drug development.

On 17 September, the company announced that it had raised $90 million from Temasek, a Singapore-based investment company. The funding round valued the company at a lower level and this has subsequently impacted the overall net asset value (NAV) of the fund. Nevertheless, the deal brings on board a new, high quality, long-term institutional investor whose funding will be used to grow Benevolent’s pipeline of internal drug development programmes and collaborations with strategic partners across its key therapeutic areas. Earlier this year, Benevolent announced revenue enhancing tie-ups with AstraZeneca and Novartis. The change in valuation was reflected in the fund’s closing NAV as at 12 September 2019.

Neil continues to reposition the portfolio founded on a belief that the global economic environment is not as robust as equity markets are implying. Identifying situations where price and value diverge has been at the centre of Neil’s investment approach over his entire career – and is underpinning the strategy that he believes is appropriate for the economic and market environment that confronts us.

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