Shareholders in Woodford Patient Capital trust (WPCT) should be prepared for their investment to suffer the same fate as those unitholders of the Woodford Equity Income fund (WEIF), according to analysts.
David Brenchley, Investment Week, 15 October 2019
Link Fund Solutions announced on Tuesday (15 October) WEIF would be wound up, with the management of the fund passing from Woodford Investment Management (WIM) to BlackRock, for the listed assets, and Park Hill Partners, for the unlisted assets.
The two management firms have been appointed to oversee an orderly realisation of the assets in their respective portfolios, with the proceeds being returned to investors.
And investment company analysts have stated their belief that the same will become of WPCT. Stifel’s analysts recently produced a note for clients outlining their preference for the portfolio to be run-off.
…Numis Securities said it believed a number of management groups would be interested in the £580m mandate, noting that, “given the nature of assets, it would need a specialist manager with the ability to carry out due diligence on the portfolio”.
Brown and Kelly added: “We believe the most likely outcome will be to place WPCT into orderly run-off alongside WEIF, perhaps also using [Park Hill] to liquidate the unlisteds.”
Stifel expects any run-off of the trust to happen over a number of years, with cash returned to investors once its bank debt of more than £100m has been repaid.
…Numis said the fact that the board has been refreshed, with a number of directors with significant investment company experience coming on board, is a positive for shareholders…
James Carthew, head of investment company research at QuotedData, said he expected BlackRock to want to offload WEIF’s stake in WPCT before the wind-up process begins on 17 January. “This could provide a springboard for an activist investor to profit from a wind up of the trust,” he said.
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