LONDON (Alliance News) - Shares in Hargreaves Lansdown PLC fell on Tuesday after star fund manager Neil Woodford suspended withdrawals from its flagship equity fund, which had been a constituent of Hargreaves' favourite fund investment list.
The fund supermarket on Monday removed LF Woodford Equity Income Fund and Woodford Income Focus Fund from its Wealth 50 list.
"As the fund can't be traded, we have made the decision to remove it from our Wealth 50 list of favourite funds. We have also removed the Woodford Income Focus Fund," Hargreaves said in a statement.
Shares in Hargreaves Lansdown were down 3.9% on Tuesday mid-morning at 2,141.00 pence each, the worst performer in the FTSE 100 Index.
According to Financial Times newspaper on Tuesday, six of Hargreaves' multi-manager funds were exposed to the Woodford equity fund by around GBP700 million in total.
https://www.ft.com/content/f333e3c0-869f-11e9-97ea-05ac2431f453
Woodford on Monday suspended withdrawals from his equity income fund as the fund's underperformance resulted in significant outflow of investors.
In a statement, LF Woodford Equity Income Fund said: "Following an increased level of redemptions, this period of suspension is intended to protect the investors in the fund by allowing Woodford, as previously communicated to investors, time to reposition the element of the fund's portfolio invested in unquoted and less liquid stocks, in to more liquid investments."
"During the period that share dealing is suspended no requests to redeem, purchase or transfer shares in the Funds will be accepted. When LFS elects to resume dealing in the shares of the Fund, we will write to all investors informing them of this fact. We will keep all investors appropriately informed about the suspension, including its likely duration," the equity fund added.
As at April 30, LF Woodford Equity Income Fund had GBP4.3 billion in assets.
The equity fund is managed by Woodford Investment Management Ltd, which also manages UK listed Woodford Patient Capital Trust PLC.
Trading in Woodford Patient Capital Trust remains unaffected by the suspension. Shares in Woodford Patient Capital Trust were down 123% at 67.08p each on Tuesday morning.
FT on Monday had reported that the suspension in fund redemptions was due to a steady stream of investor outflows and was sparked by Kent County Council seeking the return of around GBP250 million.
https://www.ft.com/content/75a748c2-8616-11e9-a028-86cea8523dc2
