Woodford Patient Capital trust drops after statement by its board on crisis gripping fund manager Neil Woodford, who fails to address investors’ fear of ‘fire sale’ of assets by his suspended Equity Income fund.
Shares in Woodford Patient Capital trust (WPCT) have dropped further after the board said its fund manager, Neil Woodford, failed to address investors’ key concern about a possible ‘fire sale’ of assets by its flagship fund.
WPCT shares plunged over 18% last week after the suspension of the £3.7 billion Woodford Equity Income fund alarmed shareholders over the potential impact on the £800 million portfolio.
Around three quarters of the trust’s assets are invested in unquoted and early-stage companies held by the larger open-ended fund. Their valuations could suffer as the fund offloads these holdings in order to meet investor withdrawal requests.
Breaking its week-long silence, the board, chaired by Susan Searle, noted the developments at Woodford Investment Management and the share price falls of some of the companies held by the portfolio.
‘The board is pleased with the operational progress of its portfolio companies, which the board believes continue to have the potential to deliver attractive returns, in line with the long-term mandate of the company. The operational performance of these businesses is not impacted by recent events,’ it stated.
Searle said the board would continue to update WPCT shareholders ‘as necessary’.
‘The board is closely monitoring the situation and is engaging with its shareholders and advisers. Separately, the board is in regular dialogue with the portfolio manager.’
WPCT shares dropped 3p or 4.8% to 59.8p, the biggest faller on the FTSE 250 index. This a further low for the company, which floated to great fanfare at 100p per share four years ago. The stock closed at a near 28% discount below its estimated net asset value of 86.9p per share.