£1.6bn of Hargreaves Lansdown client cash locked in frozen Woodford fund

Almost 300,000 Hargreaves Lansdown customers have £1.6 billion trapped in Neil Woodford’s suspended investment portfolio, the funding platform has revealed.

The fund supermarket told the Treasury committee that 133,769 clients held almost £1.1 billion of units in Neil Woodford’s frozen fund, but this number rises to 291,520 clients with £1.62 billion when including holdings in funds which have invested in the frozen portfolio.

Hargreaves Lansdown chief executive Chris Hill revealed the scale of the firm’s customer exposure in a letter to committee chairwoman Nicky Morgan.

He also told Ms Morgan that the company initiated monthly calls with Neil Woodford after concerns about the fund were first raised in 2017.

Hargreaves first raised concerns about the Woodford Equity Income Fund, which Mr Woodford suspended earlier this month, in November 2017.

In the letter, Mr Hill said that Mr Woodford promised not to make any “new investment into unquoted businesses from that point”.

Hargreaves then had monthly conversations with the renowned fund manager, but only found out last week that Mr Woodford’s fund later increased its proportion of unquoted stocks to breach a 10% cap on two separate occasions in 2018.

The Woodford fund breached the limit in February and March last year but did not inform Hargreaves on either occasion, Mr Hill said.

Mr Woodford’s fund was only removed from Hargreaves’s “best buy” list following its suspension, prompting questions by the committee over the close relationship between the two companies.

The news comes only a day after the Financial Conduct Authority (FCA) announced it opened a formal investigation into the fund.

FCA chief executive Andrew Bailey will discuss the market regulator’s investigation with the treasury committee on Tuesday June 25.

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