Investors in the failed flagship fund of Neil Woodford are facing a further blow after a £550m deal to rescue a portfolio of his stakes in biotech startups collapsed, raising concerns the holdings will be offloaded in a fire sale.
WG Partners, a boutique investment bank specialising in life sciences, had been trying to assemble a group of international investors to save most of the fund’s illiquid holdings, but has now missed the deadline to complete the deal, according to the Sunday Times.
Administrator Link is overseeing the liquidation of the Equity Income Fund’s holdings after deciding to wind it up last October. The fund had been frozen since June, leaving hundreds of thousands of investors trapped, after becoming overwhelmed by withdrawal requests.
The suspension sparked the investment industry’s biggest scandal in decades, and led Woodford to shutter his investment company shortly after Link announced the fund’s closure.
Equity Income investors received their first payout, worth between 48p and 58p on the pound, late last month following the sale of the fund’s liquid assets by Blackrock. These liquid holdings made up 74 per cent of the total portfolio.
Park Hill is still in the process of finding buyers for its illiquid — and thus harder-to-sell — holdings. These include stakes in small biotech firms, including drug developer Immunocore and gene-sequencing firm Oxford Nanopore.
In November, Park Hill gave WG Partners a period of exclusivity to assemble a group of investors to purchase the biotech portfolio, which accounts for most of the 26 per cent of remaining assets, but the deal has now fallen apart, the Sunday Times reported.
Link declined to comment on the deal falling through, but a spokesperson said: “It is in the best interests of all investors for the fund to be wound up on the basis of an ‘orderly realisation’ of the fund’s assets, which involves the sale of the fund’s assets over a reasonable period of time.”
WG Partners declined to comment on the reports.