The Kent Pension Fund has reassured members that the closure of Woodford Investment Management will not affect its ability to pay benefits.
The £6.4bn local authority fund said a "managed run-down" of the beleaguered investment manager would be best for all investors.
It was announced yesterday (16 October) that Link Fund Solutions would wind up Woodford's equity income fund from 17 January next year. The strategy had been suspended since June when it ran into liquidity problems following a £263m attempted redemption by the Kent fund.
Then, late yesterday evening, Neil Woodford stepped down from his role as manager of the Woodford Patient Capital Trust, and Woodford Investment Management announced it was closing shop.
The moves mean Kent's attempted fund redemption has been delayed yet further, and the Local Government Pension Scheme (LGPS) fund will not receive monies until January at the earliest.
Kent superannuation fund committee chairman Charlie Simkins said: "We had not been made aware that the Woodford equity income fund was being closed, as we were previously advised that the situation would be clarified in December.
"However, we believe a managed run-down of the portfolio is in the best interests of all the fund's investors."
He added that it was "disappointing" that payments to investors would not begin until January, missing the expected start in December. The allocation to the equity income fund represents around 4% of the pension fund's investments.
While it had seen a 47% return on its investment in the fund since December 2014, around £560m of redemptions and weak performance between March and May led to Kent's decision to redeem the investment.
Simkins added: "The delay in recouping the Kent pension fund's investment will not impact the fund or its ability to pay members."
The Kent fund saw an overall £221m increase in assets over the first quarter of 2019/20, with assets under management rising to £6.4bn by 30 June.
The equity income fund's initial suspension raised questions about the suitability of illiquid assets in pension portfolios, where some liquidity is needed to ensure smooth payment of member benefits. However, experts said schemes needed to keep their eyes open and understand the potential risks.
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