FCA issues update on LFS scheme of arrangement
The UK Financial Conduct Authority (FCA) has issued an update on the Link Fund Solutions (LFS) scheme of arrangement.
The Court has decided to approve the scheme. LFS expect to start making payments to scheme creditors as soon as possible, if there is no appeal of the Judge’s decision.
Investors voted overwhelmingly in support of the scheme. The small minority have now had their representations fully considered by a judge, who did not agree with their arguments.
In April 2023, Link Fund Solutions (LFS) agreed to provide, with a material contribution from its ultimate parent, Link Administration Holdings (Link Group), a significant redress payment to investors in the LF Woodford Equity Income Fund (the WEIF) of up to approximately £235 million.
The redress is to cover losses to over 300,000 investors in the WEIF as a result of failures by LFS, as the authorised corporate director (ACD) of the WEIF, in managing the liquidity of the fund.
The agreement is subject to completion of a sale of the Link Group’s Fund Solutions business, which includes LFS’s business and other additional assets by Link Group, to the Waystone Group (Waystone) and the approval by the investors and the Court of a scheme of arrangement to resolve all LFS’s liabilities relating to the WEIF.
The up to £235 million in redress includes LFS’s assets (cash, capital resource and potential insurance proceeds), plus the proceeds from the sale of Link Group’s Fund Solutions business.