Neil Woodford’s flagship fund is to be shut down, in a major humiliation for the UK’s best-known stockpicker.
Mr Woodford has also been removed as the investment manager of the fund, which will be renamed.
But investors will not get any money back until mid-January at the earliest.
Withdrawals from the Woodford Equity Income Fund have been frozen since early June after rising numbers of investors asked for their money to be returned.
There has been criticism that in the meantime, Mr Woodford continued to charge management fees to customers.
At its peak, the fund had more than £10bn of people’s money in it.
Link Fund Solutions, which runs the fund on Mr Woodford’s behalf, said: “After careful consideration, the decision has now been taken not to reopen the fund and instead to wind it up as soon as practicable. This is with a view to returning cash to investors at the earliest opportunity.”
It said attempts to sell off Mr Woodford’s investments in unlisted businesses had “not been sufficient to allow reasonable certainty” for when the fund would reopen.
Mr Woodford said: “This was Link’s decision and one I cannot accept, nor believe is in the long-term interests of LF Woodford Equity Income fund investors.”
The winding-up is expected to begin on 17 January next year, because rules state that there must be a notice period of at least three months.
A stockpicker – or fund manager – analyses the potential of different stocks to try to decide whether or not they will make a good investment.
Mr Woodford is unusual in that he is as close to a household name as is possible from the world of investing.
His “star” status was secured following 25 years of market-beating returns with Invesco Perpetual, partly when he saw through the dotcom boom.
The Financial Conduct Authority said it welcomed “the removal of uncertainty” that Link’s decision provided.
“We recognize that investors have been concerned about the state of their investment since the beginning of June,” the FCA said.
“Winding up the fund will allow the return of money to investors through a number of distributions, likely to begin in January 2020. This means investors should receive some of their money back sooner than had the fund remained suspended for a longer period.”