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Collapsed Woodford fund sells former Patient Capital

19 May 2020

The collapsed Woodford Equity Income fund offloads nearly half of its stake in former fund manager Neil Woodford’s Patient Capital investment trust at a steep loss.

The collapsed Woodford Equity Income fund has offloaded nearly half of its stake in former fund manager Neil Woodford’s Patient Capital investment trust at a steep loss.

Link Fund Solutions, administrator of the fund, has overseen the sale of over 38m shares in the trust, now called Schroder UK Public Private (SUPP ).

Stock market filings show the LF Equity Incom e fund’s stake in the trust fell to 4.8% on Thursday, down from 9% when the fund took on the shares in a controversial swap deal in March last year. Based on Thursday’s 24p closing price for the shares, the fund will have raised around £9.2m from the sale.

That marks a steep loss on the 96.67p per share price the fund paid for its stake in the trust last year in a £78.9m deal funded by the offloading of stakes in unquoted companies to the trust.

Under that deal, the fund bought newly-issued issues in the trust at net asset value (NAV), paying a premium over the price at which the shares changed hands in the market given their 12.8% discount to NAV at the time.

The shares have collapsed from 83.5p at the time of that deal to 25.6p yesterday following a series of writedowns to the trust’s assets and the impact of the suspension, and later liquidation, of the Woodford Equity Income fund, which holds a number of the same stocks.

Investors in the trust, now run by Schroders after the collapse of Woodford Investment Management last year, have also lost out from the deal, as stakes in peer-to-peer lender Ratesetter and biotech company Cell Medica acquired in the swap have been written down.

Link is overseeing the sale of stocks from the former Woodford Equity Income fund after the decision to sack Woodford and liquidate the portfolio last October.

Around £570m of investors’ money is still trapped in the fund, after two payouts, of £2.1bn and £143m, in January and March.

The fund also offloaded around £1m of shares in Purplebricks (PURP) last week. Shares in the online estate agent have collapsed from a high of just under £5 in the summer of 2017 to 36.8p today.

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