Woodford concedes defeat

Neil Woodford has admitted the end is nigh for his fund management firm Woodford Investment Management and intends to leave the spinout-focused Woodford Patient Capital Trust (WPCT), the BBC reported yesterday.
The news comes as Woodford prepares to also quit a third Woodford vehicle – the recently-suspended Woodford Income Focus Fund – having been sacked from the flagship Equity Income Fund by its administrator Link Fund Solutions earlier this week.
However a flicker of hope for WPCT remains, with the portfolio staying under Woodford Investment’s management for a three-month notice period before heading into uncharted waters once the firm has been shut down, according to the Telegraph.
Having initially hit out at the Equity Income dismissal, Woodford appears to have cooled. He said: “We have taken the highly painful decision to close Woodford Investment Management. We will fulfil our fund management responsibilities to WPCT and the LF Woodford Income Focus Fund and once completed will close the company in an orderly fashion.
“I personally deeply regret the impact events have had on individuals who placed their faith in Woodford Investment Management and invested in our funds.”
Described as a “compelling investment opportunity”, WPCT has sought to provide patient capital to top-tier intellectual properties and UK university spinouts traditionally hamstrung by a dearth of appropriate investors. It was originally conceived as a $300m investment trust before being ramped to $1.1bn in time for its initial public offering in 2016.
WPCT started out targeting annual returns of 10% and a portfolio of 100 stocks within its first two years – by the end of August 2019, the trust had £799.5m ($972m) in assets under management, however its recent troubles are well documented.
The trust’s inaugural investment in diagnostics company Sphere Medical collapsed in September 2019 when the business went into administration, despite Woodford supplying additional capital in a bid to avert disaster months earlier.
WPCT had struggled to extend a loan agreement for more than £111m ($143m) with financial services company Northern Trust set to mature in January 2020, and was arguably also impaired by an inbound transfer of $96.4m from the Equity Fund’s unquoted stock portfolio in March 2019.