Woodford Funds has issued a statement that Benevolent AI and Industrial Heat have delisted from The International Stock Exchange (TISE). These are major holdings in both the Woodford LF Equity Income Fund (a UCITS fund) and Woodford Patient Capital Trust (WPCT – a UK investment trust). While WPCT, with its closed ended structure, may suffer from further negative sentiment as a result of this latest development, this is more of a problem for the open-ended UCITS fund as this takes it over its unquoted limit.
The ‘unquoted limit’ is a UCITS restriction on the maximum (10%) the fund is allowed to invest in securities not listed on or to be admitted to an eligible exchange. Woodford Funds says that the delistings of Benevolent AI and Industrial mean that, “an inadvertent passive breach of the fund’s 10% limit will occur”. The statement goes on to say that “The FCA’s guidance, as for all UCITS limits, is that funds should be brought back into compliance following an inadvertent passive breach in a manner that is in the clients’ best interests and within six months of the date of discovering the relevant breach.” Watch this space….
Woodford Funds says that action to bring the fund back into compliance is already underway and that the decision by Benevolent AI and Industrial Heat to delist from TISE will have no impact in how the assets are managed within the fund.
This latest statements follows the announcement, on 29 July 2019, that WPCT’s board is looking at alternatives to Woodford to manage the trust’s portfolio. Click here to read our story.
City analysts have also been criticising the secret sale of WPCT shares, by Neil Woodford, following the announcement that the board were in discussion with other potential managers. Click here to see our coverage of this.