Fears that county’s pension pot losses could be double

Fears that county's pension pot losses could be double
Neil Woodford

Last week, the Times reported how Link Fund Solutions, the firm that took over the fund after it was closed last year, told investors they could expect between 46p and 59 per share held – less than 80 per cent of their original worth.

Martin Whybrow, a Green Party Councilor at Kent County Council [KCC] had said this equated to a loss of around £60million to the authority.

However, Link, have now written to KCC and informed the Council that it has suffered an initial loss of more than £120million.

KCC had £263million of its pension money invested in the Woodford fund, and nearly half of that could be wiped out.

Link revealed in a letter sent to investors last week, including KCC, that the total cost of winding up the fund expected to be more than £10.3million, including fees paid to liquidators BlackRock and PJT Park Hill for selling off the fund’s investments.

Almost £5million worth of fees have also accrued since October when the fund officially closed, which Link expects will cost a further £5.3million.

The equity fund – where investments are used to trade in stocks and shares – was started by renowned stockpicker Neil Woodford and initially performed well for KCC.

The authority invested £200million in 2014 and a further £60m in 2016, and at its peak in January 2017, the value of KCC’s investment had increased to £317million.

But by March 2019, the fund had deteriorated, causing the authority’s Superannuation Fund Committee to request the withdrawal of the Council’s money on June 3 last year.

The fund was then frozen by Mr Woodford in order to prevent a run of withdrawals from other investors.

According to an official disclosure, KCC had by then written off £36million, but the latest figures indicate a much lower valuation with a loss so far of 46.5pc.

A spokesman for KCC said: “We can confirm that we have received a letter from the administrators of the Woodford fund stating that we will be receiving an initial sum of £138.9million.”

However, he added that the final losses may not be quite as severe as more money could be forthcoming depending on how much liquidators raise selling the remaining assets.

The Woodford investment represents around 4 per cent of KCC’s £6.4billion pension pot.

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