On the go: The Kent County Council Superannuation Fund has seen the value of its holdings in Woodford Investment Management’s flagship fund fall 24 per cent in six months, wiping out £63m.
According to documents released last week by Kent County Council, the market value of the pension fund’s investment decreased to £197m at the end of September, compared with £260m at the end of March.
The pension scheme, with a total of £6.4bn in assets, has 3.1 per cent of its holdings invested in Woodford’s Equity Income fund.
In a council update, Nick Vickers, pension fund business partner, said that the fund had an unusually poor quarter, with most equity managers underperforming.
“In fact, of the active managers only Schroders UK equities and Sarasin global equities outperformed the benchmark. The Woodford return also significantly detracted from performance,” Mr Vickers said.
In the third quarter, the fund had a negative return of 11.77 per cent, which compares with a benchmark of 1.27 per cent.
Woodford’s flagship fund had been struggling with outflows, which were running at a net £9m per working day in May 2019.
But in June, Kent County Council asked to withdraw all of the £250m it had invested with Woodford through its pension fund, and Kier Group – one of the fund’s substantial holdings – announced a profit warning that prompted its shares to plummet by 40 per cent.
Co-founder Neil Woodford’s representatives had played down fears about the fund’s liquidity, saying outflows had become moderate and that the fund manager remained as confident as ever his strategy would pay off.
But when Kent County Council’s request arrived, the fund did not have enough liquidity to meet the redemptions and was suspended.
Since then, Mr Woodford has been scrambling to sell shares to improve the fund’s liquidity in an effort to pre-empt a wave of redemptions when the fund reopened.
But in October, it was announced Mr Woodford’s suspended fund, initially touted to reopen in December, would be wound down and the former star manager fired from the fund.
Kent County Council has stated that this is later than its officials previously hoped.
“However, the delay in recouping the Kent Pension Fund’s investment will not impact on the fund or its ability to pay members,” it added.
