Kent CC has said it is “disappointed” by the actions of the investment fund which has hold of £260m of its pension fund’s cash.
The Woodford Equity Income Fund suspended trading on Monday afternoon after Kent sought to withdraw its £260m investment amid growing concerns about Woodford’s liquidity.
In a statement Kent CC stressed there was so far “no loss to the pension fund” and pointed out that the £260m it had invested in Woodford since 2014 represented about 4% of the pension fund’s total £6.4bn of investments.
The council’s investment in Woodford was valued at £263m at the end of April, down from a peak value of £317m in January 2017. The statement said that since then Woodford’s performance had deteriorated and a meeting had been scheduled for 21 June to reconsider the investment.
However, after the overall value of the fund fell by a further £560m since March this year, the council’s superannuation fund committee agreed on Friday to seek to redeem the investment with immediate effect.
The council statement said: “The announcement on Monday that trading in the investment fund was suspended was not anticipated. KCC is disappointed that, as a major investor in the fund, we did not receive this prior notification.
“We do not know whether the decision to suspend trading was linked to the council’s decision to redeem. The council is committed to seeking the best outcome and could still seek a managed redemption in order to maximise the benefits for the pension fund.”
A senior Local Government Pension Scheme source told LGC a managed redemption was likely to mean Kent seeking to withdraw its money bit by bit in order to invest it elsewhere. However, they may well wait for the fund to reopen trading.
The source said: “It’s 4% of one fund in the LGPS and from what we can see there is very little if any other exposure from LGPS funds. It seems like this is an isolated issue for Kent.”
The Woodford fund was set up in 2014 by Neil Woodford who had a reputation as an innovative fund manager who delivered strong returns for investors.
The BBC reported today that at its peak, the Woodford Equity Income fund managed £10.2bn worth of assets but now manages £3.7bn.