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Woodford Watch – Benevolent AI

Woodford Watch – Benevolent AI

Over the last couple of days, following an article in the Sunday Times (behind a paywall so we haven’t linked to it), the talk has been of a fundraise for Benevolent AI at a substantial discount to the valuation that Woodford Patient Capital (WPCT) is holding it in its NAV.

WPCT has said before that it could choose to ignore ‘fire sale’ prices for assets sold off by Woodford Investment Management when valuing its portfolio but a major ‘downround’ could not be ignored. If the rumours turned out to be true, WPCT could see its second largest investment dive in value.

Benevolent AI is said to have confirmed that it has discussed raising more money from shareholders but denies that this would have to happen at a big discount to its current valuation. It raised £84m last year, so it is unlikely to be running out of money.

Many of the companies backed by Woodford will have been banking on him stumping up more money when they needed it. Some may struggle to find alternative sources of cash and some will be forced to give away much more of their company than they had hoped to secure funding. WPCT could find that its significant stakes in some of these businesses are diluted significantly. This is one reason why we would still be wary of it.

WPCT : Woodford Watch – Benevolent AI

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