Schroders rescues Woodford Patient Capital Trust

Asset management firm Schroders has rescued Woodford Patient Capital Trust (WPCT), the spinout-focused fund threatened by closure in the fiasco enveloping its current manager Woodford Investment Management.
WPCT and Schroders agreed terms for the switch to take place before the end of 2019, when the fund will be renamed Schroder UK Public Private Trust.
Schroders will waive its management fee for the first three months and will then charge 0.8% or 1% annually depending on the size of each client’s investment.
Susan Searle, chairwoman of WPCT’s board, confirmed Schroders secured the commission following a competitive process, adding: “I would like to thank our shareholders for their support throughout this process as we have worked to put in place the right portfolio manager against the background of challenging performance targets.”
Ian Hunter, an investor in WPCT, told the FT: “Schroders will be a good outcome for the trust’s management as I trust their judgment for stock selection and risk control, which the previous incumbent Neil Woodford does not seem to appreciate or even comprehend.”
Shares in the trust skyrocketed by almost a third in price following the announcement on Thursday, the FT said.
However the trust’s net asset value is currently down more than 13% year-on-year at about £0.632 ($0.812) per share amid reductions to several of its major assets in recent weeks.
Founder Neil Woodford had confirmed he would resign from WPCT amid the wind-down of Woodford Investment Management and its flagship Equity Income fund.
WPCT’s board of directors reportedly began considering Woodford’s role when Equity Income was frozen in June 2019, and he is thought to have caused further aggravation by failing to promptly notify the management of a $1.3m sell-down from his personal shareholding.
He had also transferred $96.4m of Equity Fund’s unquoted stock over to WPCT in March 2019 as the latter turned its attention to major UK listed shares, a move likely to have disparaged WPCT’s management.
Confidence in the former star stock-picker has quickly evaporated after a slew of failed investments left Equity Fund scrambling to switch out illiquid stocks and fulfil redemption requests.
WPCT was the UK’s largest investment trust by size when it launched in 2015, raising $1.1bn to supply patient capital to businesses including university spinouts with long-term growth horizons.