The UK Financial Conduct Authority (FCA) has issued an update on the Link Fund Solutions (LFS) settlement scheme.
The Court decided to approve the scheme. LFS expects to begin making payments to the plans’ creditors as soon as possible, if the judge’s decision is not appealed.
Investors voted overwhelmingly in favor of the program. The small minority have now had their submissions fully considered by a judge who disagreed with their arguments.
In April 2023, Link Fund Solutions (LFS) agreed to provide, with a significant contribution from its ultimate parent company, Link Administration Holdings (Link Group), a significant compensation to investors in the LF Woodford Equity Income Fund (the WEIF) in approximately £235 million.
The redress is to cover losses to more than 300,000 investors in WEIF as a result of failures by LFS, as authorized corporate director (ACD) of WEIF, to manage the fund’s liquidity.
The deal is subject to the completion of the sale of Link Group’s Fund Solutions business, which includes the LFS business and other additional assets by Link Group, to the Waystone Group (Waystone) and investor and Court approval of a plan agreement to resolve all liabilities of LFS related to WEIF.
The consideration of up to £235m includes LFS’s assets (cash, capital resources and potential insurance proceeds), plus proceeds from the sale of Link Group’s Fund Solutions business.