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Job cuts planned at troubled Woodford investment firm | Job cuts planned at troubled Woodford investment firm |
(32 minutes later) | |
The firm of well-known fund manager Neil Woodford is planning redundancies after investors pulled billions of pounds from his flagship fund. | The firm of well-known fund manager Neil Woodford is planning redundancies after investors pulled billions of pounds from his flagship fund. |
The cuts are expected to affect a small number of support staff, rather than staff managing investments. | The cuts are expected to affect a small number of support staff, rather than staff managing investments. |
Woodford Investment Management employs around 45 people. | Woodford Investment Management employs around 45 people. |
Despite the suspension of the flagship fund and the job cuts, the firm continues to charge £65,000 per day in management fees. | |
The suspension of the Woodford Equity Income Fund in June caused an outcry among investors. | The suspension of the Woodford Equity Income Fund in June caused an outcry among investors. |
Mr Woodford suspended the fund last because it could not meet requests from investors to withdraw their money. | Mr Woodford suspended the fund last because it could not meet requests from investors to withdraw their money. |
Link Fund Solutions, which administers the fund, said this week that Woodford's flagship would remain suspended, without giving a reopening date. | Link Fund Solutions, which administers the fund, said this week that Woodford's flagship would remain suspended, without giving a reopening date. |
The firm is selling the fund's less liquid and unlisted assets, which cannot quickly be turned into cash, in favour of more liquid stocks, so that it can reopen. | The firm is selling the fund's less liquid and unlisted assets, which cannot quickly be turned into cash, in favour of more liquid stocks, so that it can reopen. |
Fees question | Fees question |
Mr Woodford has faced criticism from investors, regulators and MPs for continuing to charge fees while the fund is suspended. | Mr Woodford has faced criticism from investors, regulators and MPs for continuing to charge fees while the fund is suspended. |
The fund's £65,000 a day management fee "covers a wide range of costs associated with running an actively managed fund," the firm said in a bulletin for financial advisers. | The fund's £65,000 a day management fee "covers a wide range of costs associated with running an actively managed fund," the firm said in a bulletin for financial advisers. |
"This includes the cost of fund management and also covers the costs of infrastructure and the staff across our entire business who are involved in running the fund." | "This includes the cost of fund management and also covers the costs of infrastructure and the staff across our entire business who are involved in running the fund." |
In the days following the equity income fund suspension, the firm lost the right to manage nearly £4bn. | In the days following the equity income fund suspension, the firm lost the right to manage nearly £4bn. |
"We have reluctantly entered into redundancy consultations with a number of staff to advise them that their roles are at risk," a spokesman for the firm said. | "We have reluctantly entered into redundancy consultations with a number of staff to advise them that their roles are at risk," a spokesman for the firm said. |
The firm manages a second, smaller open-ended fund, the income focus fund, as well as the listed Woodford Patient Capital Trust (WPCT). | The firm manages a second, smaller open-ended fund, the income focus fund, as well as the listed Woodford Patient Capital Trust (WPCT). |
The income focus fund, which does not invest in unlisted firms, has seen assets under management drop by nearly 40% to £295m since the suspension of the main fund, according to Morningstar data. | The income focus fund, which does not invest in unlisted firms, has seen assets under management drop by nearly 40% to £295m since the suspension of the main fund, according to Morningstar data. |
WPCT shares have dropped by more than 25% since the flagship fund suspension, though they were up 3.4% on Wednesday. | WPCT shares have dropped by more than 25% since the flagship fund suspension, though they were up 3.4% on Wednesday. |
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