Interactive Investor

New hope for Patient Capital investors

24th October 2019 13:29

Jemma Jackson from interactive investor


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A new manager at Woodford Patient Capital brings hope to investors, says our head of personal finance.

Moira O'Neill, Head of Personal Finance, interactive investor, says: "Beleaguered Woodford Patient Capital Trust (LSE:WPCT) shareholders finally have something to be happy about with news that Schroders (LSE:SDR) has been appointed the new portfolio manager and that the trust is going to be run with the same existing investment mandate.

"The majority of Patient Capital Trust investors are likely to have been actively interested in the early stage companies and it would have been very painful for investors if the trust had been wound up or its objective changed.

"The other fear had been that a new manager would dramatically increase the fees, but Schroders has been fair on this. The proposed performance fee has high hurdles and while performance fees are generally not well liked by investors, given the current situation it is reasonable.

"The board of the trust look to have finally got their act together and with new members and enhanced scrutiny, this is hopefully the start of a way back for shareholders.

"Ultimately, the trust will only be successful if the trust can attract new investors, raise new cash and take part in the follow-on fundraising rounds.

"The hope, now that new management is taking over, is that the market will stop looking at Woodford Patient Capital Trust holdings as a sell list and start to look at whether they are in fact attractive buying opportunities – so that the underlying valuations improve.

"Better governance and a new management team should help sentiment too - the market certainly likes the news."

These articles are provided for information purposes only.  Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties.  The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

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