Woodford investment trust hit by triple write-down

Under-fire fund manager Neil Woodford has been dealt another blow after his investment trust was forced to write down the value of three of its holdings.

Shares in the Woodford Patient Capital Trust dropped as much as 8% at one stage after it disclosed the move, which it said would reduce its net asset value (NAV) by another 3.1p a share.

While it did not say which holdings were affected, it said: “These valuation adjustments reflect the challenging fundraising environment for these businesses, which may impact their ability to, or the level at which they may be able to, raise capital in the near-term.”

The trust is a listed business that contains the various investments Mr
Woodford and his suspended equity income fund have sunk funds into.

It comes after the controversial suspension of Mr Woodford’s £3.1 billion flagship fund was extended on Monday for another 28 days.

The Woodford investment trust has seen its shares halve in value so far this year as it has suffered since the star fund manager froze investors out of accessing money they have in the equity income fund.

It said earlier this month that the value of the trust’s biggest investment holding, Benevolent AI, halved, sending shares tumbling.

The trust’s NAV now stands at 65p a share, down from 89.7p at the end of May, just before its sister fund was gated on June 3.

Relations have been rocky between Mr Woodford and the trust after he sold £1 million of shares to fund a tax payment.

Steven Harris, chief executive of Circassia Pharmaceuticals and one of Mr Woodford’s key allies at the trust, stepped down from the trust’s board at the beginning of September.

Board members will ultimate decide whether they want to continue with Mr Woodford at its helm as they assess their options regarding the future management of the fund.

The trust may update on this at its half-year results on Monday September 30.

Since suspending the equity income fund, Mr Woodford has vowed to reinvest customers’ money into more listed shares of larger companies, rather than in various smaller, unlisted ventures, where cashing out can be far harder.

Investment rules say funds should only invest around 10% of their clients’ money into unlisted businesses, but Mr Woodford’s fund circumvented this by investing into listed trusts, which are holding companies for the unlisted businesses.