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Woodford EI suspension places WPCT in spotlight

Woodford EI suspension places WPCT in spotlight

The suspension of dealing in Neil Woodford’s open-ended Equity Income Fund – in the face of a wave of redemptions by instututions – has had a knock on effect on the fund manager’s listed entity Woodford Patient Capital, despite the investment trust being ostensibly unaffected by the move. WPCT’s shares have fallen by 7% today, presumably as investors have become concerned about the potential for a hypothetical distressed sale of some unquoted assets held by Woodford Equity Income may, if also held by WPCT, may put the latter’s carrying values under pressure.

WPCT’s shares currenty trade around a mid-price of 71.6p and the NAV estimated as of 31 May was 89.61p, sugesting the shares trade at a large 21% discount. WPCT’s NAV in absoluite terms was £814.2m, based on the 908.6m shares outstanding, after shares were issued earlier this year to acquire certain shareholdings from Woodford Equity Income.

WPCT’s gross asset value – which also refects gearing and the fair value of derivatives taken out to hedge currency exposure, was £1.02bn on 30 April, its last reporting date. At this time, the NAV was 878.5m and the borrowings/value of FX contracts £141.5m.

WPCT top 10 holdings at the end of April (% of gross asset value) are shown in the table below. Of these, most are still private (only Autolus and Prothena are publicly quoted) and most are also held by Woodford Equity Income, despite not paying an dividend. The valuations of BenevolentAI and Oxford Nanopore are particularly vulnerable as of their size (in both cases ~$2bn), although at least that of Oxcford nanopore has been validated by a recent third party investment.

Company  % of GAV
Benevolent AI 8.43
Industrial heat (A+B) 8.34
Oxford Nanopore 7.45
Autolus 7.13
Atom Bank 6.93
Proton Partners Int 6.31
Immunocore A 4.84
Oxford Sciences Innovation 3.97
Mission Therapeutics 1.85
Prothena 1.84
Ratesetter 1.81
NAV/share (p) 96.68
NAV (£m) 878.5
FX derivatives/gearing -141.5
GAV (£m) 1,020




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