Interactive Investor

Woodford Patient Capital shares hit record low, but board tight-lipped

15th October 2019 10:50

Kyle Caldwell from interactive investor


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After the announcement that Woodford Equity Income fund is to be wound up, Woodford Patient Capital Trust’s share price fell notably.

The board of Woodford Patient Capital has remained tight-lipped on Neil Woodford’s position as manager of the investment trust in the wake of the news that LF Woodford Equity Income is to be wound up.

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Following the announcement this morning (15 October) that Link, the authorised corporate director of the suspended Woodford Equity Income fund, has decided to close down the fund permanently, Woodford Patient Capital Trust’s share price has fallen notably, declining by 6.8% to 35.1 pence per share at the time of writing, 9.30am. This represents an all-time low.

The falls come amid uncertainty as to whether Neil Woodford will remain as manager of the trust. At the end of September, during the release of the half-yearly results for Woodford Patient Capital Trust, Susan Searle, the investment trust’s chairman, noted the possibility of replacing Neil Woodford as manager of the trust can “take time” and that “ultimately the board’s decision will be that which is in the best interests of protecting long-term value for shareholders”.

This morning the board re-issued its previous stance, stating: “As previously announced, the board has been undertaking a review of the company's management arrangements and will make a further announcement in due course.”

It added that it “notes the statement by Link Fund Solutions Limited not to re-open LF Woodford Equity Income and instead to wind it up as soon as practicable”.

The half-yearly results for Woodford Patient Capital Trust showed losses of 26% in the first six months of the year, in what Searle called “the most challenging period for the company since it floated in 2015”.

Woodford Patient Capital Trust has been under pressure for the past few years; however, the trust started to see major losses following the suspension of Woodford Equity Income (WEIF) in early June.

Some of the trust’s holdings have suffered from the “forced sales” of holdings held in LF Woodford Equity Income. Both the trust and fund have had significant portfolio overlaps.

Added to this, the negative sentiment surrounding Woodford following the suspension of LF Woodford Equity Income has likely led investors to sell out of the trust.

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This article was originally published in our sister magazine Money Observer, which ceased publication in August 2020.

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.

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