Schroders Capital Global Innovation (INOV), the former Woodford Patient Capital Trust in wind-down, has more than doubled its money on a US data security firm sold for $1.725bn (£1.3bn) last week.
The sale of unlisted portfolio company Securiti AI, based in San Jose, California, to Veeam Software, another private company in Seattle, Washington, values the investment trust’s stake at £7.7m, or £4.1m more than £3.6m valuation at 30 June, a 114% uplift. That represents a 2.3% boost to net asset value (NAV), although following the £37m return of capital in July, the actual uplift to NAV in the now £93m fund is around 2.9%.
Fund manager Schroders Capital has invested indirectly in Securiti since 2019, the same year in which it took over the then Woodford Patient Capital from its former manager Neil Woodford.
In November 2023, the investment trust made a direct investment alongside other Schroders Capital funds.
Proceeds from the sale will go towards the next return of capital to shareholders as the company complies with their vote in February to sell its assets and wind down the company.
Mergers and acquisitions (M&A) have already assisted in the process. The tender offer in July that returned £37m by buying back just over 21% of the shares at 21.1p was kick started by the £18.7m the trust made from the $400m sale of Swiss cancer treatment provider Araris Biotech in March.
Fund managers Tim Creed and Harry Raikes congratulated the management at Securiti AI on an “outstanding achievement” that generated “meaningful proceeds” for their shareholders sooner than they expected.
“The acquisition by Veeam reflects the strength of Securiti’s technology and its leadership in the rapidly growing data security and AI governance market,” they said.
After the wind-down vote, INOV shares hit an all-time low of 8.7p just before the Araris announcement the following month. Since then they have soared 68% to 14.6p. They remain well below the 38p at which Schroders took over the portfolio in December 2019 after Woodford’s business collapsed following the suspension of his flagship equity income fund and his resignation as the trust’s manager.
The decline since Schroders’ appointment largely reflects the write-downs in many of Woodford’s legacy investments with Schroders’ life science investments proving to be a bright part of the portfolio. Despite this year’s sales being struck above asset value, INOV’s stock stands 31% below NAV. The company was launched by Woodford in April 2015 at 100p per share after a then record fund raise of £800m.
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James Carthew, head of investment company research at QuotedData, said: “This win for Schroders Capital Growth Innovation feels somewhat poignant, an indication perhaps of what might have been if the Schroders team had been running the trust since inception instead of Woodford.”
