FCA reasserts proposed Woodford redress is 'subset of total losses' as sanction decision delayed

investmentweek.co.uk:

Smith argued the fault of Link Fund Solutions Limited lies in liquidity management failings, as the regulator has since it first revealed the scheme in April 2023.

Meanwhile, the decision whether or not to sanction the scheme has been pushed into February at the earliest.

Speaking on behalf of the regulator at the second day of the sanction hearing (19 January) of the proposed scheme of arrangement, which was passed last month by a large majority of creditors who voted, Tom Smith KC confirmed the FCA regards the £298m redress figure, of which investors may see up to £235m if the scheme is sanctioned, as only a «subset of the total losses» suffered by investors.

Remaining Woodford fund assets shrink 40% since last distribution revealed

Smith argued the fault of Link Fund Solutions Limited lies in liquidity management failings, as the regulator has since it first revealed the scheme in April 2023.

He suggested the redress on offer would not cover any potential losses resulting from failures relating to poor investments, manager discretion or deviation from the investment mandate, issues which would likely lie with the investment manager, Woodford Investment Management.

He noted the FCA believed the investment performance of the fund was «poor» in the latter years, which had caused some investor losses, but these issues would not be covered by this redress.

Smith added the FCA had open and ongoing investigations relating to the fund, so could not speak further on the matter.

A decision on whether to sanction the scheme will not be made public until likely February, with judge Jonathan Richards taking a «couple of weeks» to assess the case, before issuing an embargoed judgement.

FCA confirms Link Fund Solutions