Investors who lost nothing in the Woodford collapse will profit from the compensation while potentially thousands of those affected will not receive a penny.
Hargreaves Lansdown funds that were invested in Neil Woodford’s flagship fund are to receive a cash injection next month when the first compensation payment is made. However, investors who actually held these funds at the time of the debacle in 2019 and later sold out will not get any of their money back.
Customers of Hargreaves Lansdown accounted for £1.6bn of the £3.7bn trapped inside the fund manager’s collapsed equity fund. Almost 134,000 were invested directly in Woodford Equity Income Fund, while a further 158,000 had indirect exposure through Hargreaves Lansdown’s funds, including the popular Multi-Manager range. One of these six funds – the HL Multi-Manager Income & Growth trust – had an 11pc stake.
Like other investors, Hargreaves Lansdown was blocked from taking its money out.
But investors holding the multi-manager funds were free to redeem their cash – and many rushed for the exit.
Data from research firm Morningstar shows investors pulled £500m out of the multi-manager funds over the six months following the Woodford fund’s collapse.