Link Fund Solutions has sold 19 of the stricken LF Equity Income Fund’s healthcare assets in return for up to £224 million, as it seeks to wind up the fund and return capital to investors.
The deal to sell “a significant portion” of the former Woodford Equity Income Fund to Acacia Research Corporation comprises both listed and unlisted stocks including Theravance Biopharma, Oxford Nanopore and Rutherford Health.
The fund’s net asset value at 3 June, including the amount receivable from the sale of assets to Acacia, was £444 million.
It has previously made two capital distributions to investors totalling £2.3 billion in January and March.
News that progress has been made in the sale of 19 companies, representing around half of the remaining assets by value to Acacia Research will be cautiously welcomed by investors, said AJ Bell head of active portfolios, Ryan Hughes, as it moves them one step closer to being able to draw a line under the situation.
“However, there will no doubt be huge frustration at the valuation achieved by Park Hill, which has been managing this process, given the valuation may be lower than other offers that had reportedly been received and rejected previously,” he said.
This highlighted the very real problem of being a forced seller with all potential purchasers knowing that Park Hill and Link were in no position to try and push the price higher, Hughes said.
“At the end of the day with such illiquid stocks, these assets are only worth what someone is prepared to pay for them,” he added.