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Investors in fund behind Purplebricks to get as little as 46p in the £1 back

Initial payments to battered investors by company winding up the fund will leave hundreds of thousands of people and many high profile institutions out of pocket.

Nigel Lewis

woodford purplebricks

The ongoing financial disaster for those who invested in the £3.2 billion equity income fund that backed Purplebricks continues after the company winding it up revealed that they may get back as little as 46p in the £1.

Purplebricks was one of several high-risk tech firms and biotech companies that superstar City figure Neil Woodford backed via the fund.

But the hybrid agency’s subsequent share price collapse contributed to the fund’s suspension and subsequent closure last year.

When the shares launched in late 2015 for around 90p Purplebricks was lauded as the next big tech stock and by summer 2017 had reached £5.17 a share, helping boost the value of Woodford’s equity income fund substantially.

Purplebricks’ share price subsequently nosedived and has been trading at around £1/1.10 since May last year.

Wind up

The company winding up the fund, Link Fund Solutions, has said investors will initially get between 46.3633p and 58.9936p per share, depending what version or ‘share class’ of the fund they held, compared to their original £1 value.

Investors, who number over 100,000 people and many institutions, are to be paid the money on January 30th.

The fund was frozen in June and since then three banks have been trying to sell the assets remaining within it. The fund offloaded most of its Purplebricks shares in October last year.

One of the biggest losers in the debacle is Kent County Council, which had £238 million tied up in Woodford’s fund, but could now lose up to £100 million after receiving just £138 million as its initial repayment.

January 30, 2020

One comment

  1. Purplebricks is going for gold at the Olympics, but not many of the investors who lost their shirt will be waving them on. The big news in 2020 will be to see in April their annual accounts cut of point, if the company ever makes a profit, as until now it has not made a penny if all the trading of the once global brand is analysed on one balance sheet. Having divested itself of most of the overseas ‘problem’ areas and retained some external UK reach, it might be a photo-finish on the line if the whole of Purplebricks gets into the black. Because if it does not, I do not see that outside investors will be lining up to invest. More likely Axel Springer will take them private, maybe with the recent merging of positions in the c-suite this is on the cards. Maybe only Vic knows.

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