Fund manager Neil Woodford’s Patient Capital Trust mulls raising more money
Star fund manager Neil Woodford's solo venture, Woodford Patient Capital Trust, has announced it's considering raising more money.
"With the current market conditions in mind, the board … is currently looking at ways it can raise additional capital in the year ahead and will consult with, and gauge interest from, investors," the company said in a statement to the London Stock Exchange today.
Its shares closed down 2.59 per cent at 95.69p per share this afternoon.
Woodford Patient Capital Trust raised £800m from a stock market float in April. The fund focuses on start-ups and early-stage businesses with high growth potential, and targets annual returns of 10 per cent "over the longer term". It's almost fully investment, with the remaining cash all committed.
Mark Dampier, head of investment research at Hargreaves Lansdown, said: "The performance of the underlying companies has generally surpassed expectations."
"Woodford now wants to consider raising further money specifically to take advantage of these untapped opportunities. In his view there are some outstanding investment cases but they will not be around forever."
"The investment trust currently has 60 holdings and we would expect him to look to add 20 to 30 with any new money. New cash would also likely be used for further investment into the existing holdings when they wish to raise new cash to help with research and development."
"It must be said, that if and when there is a capital raise, a new large tranche might cause the trust’s share price to fall to a discount (to its net asset value) in the short term."
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