Woodford says he’s ‘very sorry’ as his Patient Capital trust shrinks by a quarter in six months and its board considers ditching him
- Woodford said he was ‘very sorry’ about the ‘extremely disappointing’ period
- The net asset value of Patient Capital fell by 26% to £654m in six months to June
- The board said they were ‘talking to other potential managers’ to replace him
Fallen fund manager Neil Woodford is facing the axe from the Patient Capital trust that bears his name, as it emerged the value of its assets have tumbled by more than a quarter in the past six months.
In Woodford Patient Capital Trust’s half-year update, the 59-year old, who has been seriously testing investors’ patience, told shareholders he was ‘very sorry’ about the ‘extremely disappointing’ period.
The fund manager, whose flagship Equity Income Fund is currently frozen insisted on that his long-term investing approach would eventually pay off.
However, the board of the Patient Capital trust, which has seen shares lose 55 per cent of their value since launch, reiterated that they are ‘talking to other potential managers’ to replace Woodford.
‘Very sorry’: But Neil Woodford insisted he is committed to his long-term investing approach
The net asset value of Patient Capital fell by 26 per cent to £654million in the first six months of the financial year, following a series of writedowns in the value of some of its holdings.
Meanwhile, the trust’s share price is trading at a huge 32.3 per cent discount to that 65p per share net asset value as sour sentiment has left investors shunning it.
Patient Capital is separate from Woodford’s flagship Equity Income fund, which has been gated since June 3, preventing savers from withdrawing their cash.
But the crisis at Equity Income has spread to Patient Capital amid investor fears that Woodford has lost his golden touch.
Shares in Patient Capital have halved in value since January, after a dip today they rose 2.2 per cent on the day.
‘Shareholders have endured an extremely disappointing six-month period, for which I am very sorry,’ said Woodford.
‘While shareholders can be forgiven for thinking there are no positives, I continue to believe that the majority of the businesses we have invested in are making good progress, in line with our pre-agreed milestones.’
Looking at the performance of the stocks the trust invests in, he conceded that pharma businesses Immunocore and Benevolent AI have seen their values fall, but remained positive for their future.
Meanwhile, Precision Biopsy and Scifluor Life Sciences were written down significantly, ‘as it became clear that the funding options that both businesses had been pursuing were unlikely to come to fruition’.
Woodford has been criticised for collecting £7.8million in fees since savers were frozen out from his flagship Equity Income fund.
Shares in Patient Capital have halved in value since January to around 43p today
‘The Board continues to evaluate the position of the Portfolio Manager and, as previously announced, is talking to other potential managers,’ said Susan Searle, chairman of Patient Capital.
‘This process can take time and ultimately the Board’s decision will be that which is in the best interests of protecting long-term value for shareholders.’
Patient Capital, which was was demoted from the FTSE 250 index earlier this month, was set up in April 2015.
At the time, it raised £800million, making it the UK’s largest-ever investment trust launch.