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Investment Trust Insider on Syncona

07
2018
August

Investment Trust Insider on Syncona

James Carthew: the problem with Syncona’s big premium

Regular readers of this column will have realised that I often have as much of a problem with investment trusts trading on very high premiums as I do with trusts trading on very wide discounts. I explained a couple of weeks ago why it might be reasonable for listed funds in infrastructure, renewable infrastructure and parts of the property market to trade at modest premiums, but a year or so ago I wrote about FastForward Innovations (FFWD), a vehicle investing in technology and life sciences.

At the time, its shares were 13.2p and looked to be on a 60% premium to net asset value (NAV). Today the shares are still 13.2p…

…part of the problem is that FastForward’s portfolio is hard to value. That leaves room for investors to get overexcited about its prospects. It also means that sentiment could swing the other way and leave it trading on a big discount.

This leads me on to Woodford Patient Capital (WPCT) and Syncona (SYNC). WPCT looks to be on an 11% discount while Syncona is on a 51% premium to its last published NAV and about a 37% premium to what Marten & Co think the NAV might be. All three funds, including FastForward, are linked in that they provide a socially useful function of funding early-stage businesses.

I have been critical in the past of the degree of concentration in WPCT’s portfolio and the collapse in the value of Prothena (PRTA.O), once its largest holding, showed how dangerous a policy this can be.

Today, WPCT’s largest holding is… read more here

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