Woodford compensation in sight after investors back controversial £230m scheme
Burnt investors in Neil Woodford’s collapsed investment fund are on the cusp of compensation after they overwhelmingly backed a £230m redress scheme last night.
The administrator of Woodford’s eponymous fund, Link Fund Solutions, tabled a compensation deal in April that was signed off by the Financial Conduct Authority (FCA) and would see some 300,000 investors receive compensation.
In a vote on the deal, which closed earlier this month, over 90 per cent of investors backed the scheme.
The vote could bring to a close the four year battle for compensation for some 300,000 investors, who were left millions of pounds out of pocket when the fund collapsed in 2019.
“Over four and a half years have passed since the fund suspended and with well over 90 per cent of investors voting in favour of the scheme.
“There will be many who have done so simply because they are fed up with how long this process has taken,” said Ryan Hughes, interim AJ Bell Investments managing director.
“While there will no doubt be some that feel that this scheme doesn’t compensate them sufficiently for their losses, others will feel that getting back around 80 per cent of the fund value on suspension will be more than they could have hoped for when the fund initially suspended.”
The scheme has faced fierce resistance from pockets of investors in recent weeks who argue they are being short changed by the FCA-backed deal.
The regulator has been accused of misleading calculations in its claim that investors will earn back 77p in the pound of their losses.
To reach the 77p in the pound figure, critics say the FCA has focused on the extra losses suffered by investors who were locked in the fund compared with clients who exited immediately before withdrawals were blocked.