Dealing in shares of Woodford Income Focus have been suspended immediately until further notice, Link Fund Solutions announced on Wednesday (16 October).
The news comes a day after ACD Link said it had sacked Neil Woodford as manager of Woodford Equity Income and would begin the winding up of the fund, which had been suspended since 3 June.
Later in the day, Woodford Investment Management served notice it would be stepping down as manager of Income Focus and Woodford Patient Capital Trust and the company will be closed thereafter.
As a result of WIM's resignation, Link said it "expects that the redemptions in the Fund will reach a level whereby it may no longer be able to continue to meet redemption requests without prejudicing the interests of both remaining and redeeming investors".
In a statement, Link added: "After consideration of all relevant circumstances relating to the fund's assets, LFS has come to the conclusion that it is in the best interests of all investors in the fund to suspend the issue, cancellation, sale and redemption of shares in the fund.
"The period of suspension is intended to protect investors from this anticipated increased level of redemptions in the fund.
"The ACD considers that, as a ‘forced seller' of its assets to meet redemptions, the values received by the fund for such assets might be adversely impacted and the fund might not receive full value from such sales."
Link said it would take the suspension period to consider its available options. These include appointing another investment manager, merging it into another fund or winding the fund up.
"Whilst LFS considers these options, Woodford has committed to continue to work collaboratively with LFS in its capacity as the appointed investment manager of the fund," it said.
Link added that the suspension would be lifted as soon as it had decided which was the best course of action and it would review the suspension "at least every 28 days", though it expects to write to investors with an update within the next 14 days.
Following yesterday's announcement, Neil Woodford said the firm had "taken the highly painful decision to close Woodford Investment Management".
He added: "We will fulfil our fund management responsibilities to WPCT and the LF Woodford Income Focus Fund and once completed will close the company in an orderly fashion.
"I personally deeply regret the impact events have had on individuals who placed their faith in Woodford Investment Management and invested in our funds."
Darius McDermott, managing director of Chelsea Financial Services, said it was "a very sad day for both [Woodford's] investors and his employees", though McDermott and Ryan Hughes, head of active portfolios at AJ Bell, described the news as "inevitable".
"Without the fees from the equity income fund and with no [management or] performance fee coming from the Patient Capital Trust, it was difficult to see how the business could survive," said Hughes.
Adrian Lowcock, head of personal investing at investment platform Willis Owen, said it was the right decision for Woodford to make "as it will put a stop to the inevitable speculation". It was also right to step down from WPCT, Lowcock added, "given Woodford's presence had become a distraction to the trust".
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