Locked-in Woodford investors still pay fees
Investors are trapped in Neil Woodford's frozen flagship fund until further notice, and he is still charging them thousands of pounds in fees.
The former star fund manager shocked the financial world a month ago by halting withdrawals after a poorly-performing run. On Monday, the lockdown was extended with no timeline given for its lifting.
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Meanwhile, Woodford is pulling in £65,000 (€72m) a day in management fees while he sells off assets to raise cash.
The redemption freeze has damaged Woodford's reputation, built up over decades by correctly calling major swings in technology, tobacco and other stocks.
He has come under fire from politicians, regulators and long-time backers who have called on him to waive his management fee while the LF Woodford Equity Income Fund is frozen. He has refused, saying he's doing his job by gradually selling down the fund's stakes in smaller companies.
"Because the fund is suspended, there are no redemptions and the Woodford team is not forced to sell assets at distressed prices," said a statement from Woodford Investment Management.
Progress has been made in selling some of the fund's unquoted holdings, and the firm is in the process of appointing a partner for further sales, the statement said.
On Tuesday, a representative for Woodford said in an emailed statement that the firm did not intend to waive the fees as it needs to cover the cost of managing the fund.
Woodford raised at least £300m in June selling stakes, including in BCA Marketplace, and NewRiver REIT.