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Woodford Loses $54 Million Selling Stocks From Frozen Fund

Suzy Waite and Carla Canivete
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Woodford Loses $54 Million Selling Stocks From Frozen Fund

(Bloomberg) -- Neil Woodford has lost at least 43.5 million pounds ($54 million) from selling some stakes from his frozen flagship fund.

The embattled money manager took the biggest hit on shares in NewRiver REIT Plc. Woodford spent about 181 million pounds building up his stake in the U.K. retail landlord, but recouped just 131 million pounds when he unloaded the shares, according to publicly available information and Bloomberg calculations. He made money on just two of 10 companies: BCA Marketplace and Oakley Capital.

A representative of Woodford Investment Management said the money manager and his team “continue to make progress” in building a “much more liquid portfolio” for the flagship fund. When it reopens, the fund “will continue to be focused on undervalued companies, and the majority of them will be FTSE 100 and FTSE 250 index constituents,” the spokesman said.

Woodford stunned the financial world in early June when he halted withdrawals from his LF Woodford Equity Income Fund after a run of poor results led to mounting redemption requests. He has since lost key executives and long-time backers, has been hit by criticism from a top lawmaker and faces an investigation by the U.K. markets regulator.

The firm has said the decision was made to give Woodford time to sell down the fund’s holdings of lightly traded stocks, and that he isn’t a forced seller.

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The bright spots in Woodford’s sales spree have come from BCA Marketplace and Oakley Capital. The money manager invested in BCA in 2015 at a volume-weighted average price of 139 pence per share, and exited at 241.5 pence, resulting in a profit of 59.6 million pounds, Bloomberg calculations show. Selling the Oakley stake brought in another 33.8 million pounds.

Bloomberg’s analysis focuses on stakes that Woodford has sold in their entirety. The calculation of his gains and losses excludes dividend payments.

Link Fund Solutions Ltd., the administrator of Woodford’s flagship, has said its goal of lifting the suspension in early December is realistic. The fund has 3.1 billion pounds of assets under management, according to Morningstar.

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To contact the reporters on this story: Suzy Waite in London at swaite8@bloomberg.net;Carla Canivete in London at ccanivete@bloomberg.net

To contact the editors responsible for this story: Shelley Robinson at ssmith118@bloomberg.net, Patrick Henry

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