Neil Woodford faces the axe as the value of his Patient Capital investment trust shrinks by a quarter
- 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 star fund manager Neil Woodford is facing the axe from the trust that bears his name as the value of assets it manages have shrunk by more than a quarter.
In his half-yearly performance update for Woodford Patient Capital Trust, the 59-year old told shareholders he was ‘very sorry’ about the ‘extremely disappointing’ period but insisted on the efficacy of his long-term investing approach.
However, the trust’s board reiterated they were ‘talking to other potential managers’ to replace Woodford as portfolio manager.
‘Very sorry’: But Neil Woodford insisted he is committed to his long-term investing approach
It comes as the net asset value of Patient Capital fell by 26 per cent to £654million in the first six months of the year, following a series of writedowns in the value of some of its holdings.
Patient Capital is separate from Woodford’s flagship Equity Income fund, which has been gated since June 3, meaning savers cannot withdraw their cash.
But the crisis at Equity Income has spread to Patient Capital amid fears among investors that Woodford has lost his golden touch.
Shares in Patient Capital have halved in value since January and the trust trades at a 35 per cent discount to the underlying value of the assets it holds. Today they fell 1 per cent to 43.56p.
‘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 said pharma businesses Immunocore and Benevolent AI have seen their values fall, but remained positive for their future.
But 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
‘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.