Link Fund Solutions says Woodford investors approve redress scheme

By Kirstin Ridley

LONDON, Dec 14 (Reuters) - Investors trapped in a collapsed fund run by former star stock picker Neil Woodford have overwhelmingly backed a proposed redress scheme of up to 230 million pounds ($290 million), the fund's authorised corporate director said on Thursday.

Link Fund Solutions (LFS) said around 93.7% of investors who voted for the scheme, representing 96.1% of the value, had approved a proposal that the Financial Conduct Authority (FCA) has encouraged bruised investors to consider.

"This is an important step for the scheme, and the establishment of the settlement fund, which LFS has always believed is the best option available for investors as it materially enhances the amount of redress available from LFS and provides the fastest route for redress possible," LSF said in a statement.

LFS said as thevote has comfortably met the statutory threshold for approval, it will ask the court to approve it at a hearing onJan. 18.

The Woodford Equity Income Fund (WEIF), which once managed more than 10 billion pounds, was suspended in 2019, trapping 300,000 investors and sparking an FCA inquiry and three investor lawsuits against LFS and one against Hargreaves LansdownHRGV.L, the investment platform that promoted the fund.

More than 54,000 investors attended a scheme meeting in person or by proxy, LFS said.

The settlement proposal falls well short of the 1.0 billion pound-plus redress mooted by some claimant law firms. But LFS has said the scheme will allow it to distribute to investors the maximum amount possible in the shortest possible time.

Woodford, once one of Britain's most high-profile fund managers, was sacked after over-sized bets on hard-to-sell illiquid assets left him struggling to meet redemption requests following months of underperformance.

The FCA has said LFS made "critical mistakes and errors" in how it oversaw the fund's liquidity risk management and controls.

But it also advised investors to accept the redress scheme, rather than face lengthy and costly court battles. It has said LFS's scheme does not reflect compensation that might be owed by others over potential wrongdoing.

"Multiple parties" remain under investigation over events that led to the WEIF suspension, the FCA has said.

($1 = 0.7956 pounds)

(Reporting by Kirstin Ridley, editing by Huw Jones)

((huw.jones@thomsonreuters.com; +44 207 542 3326; Reuters Messaging: huw.jones.thomsonreuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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