Investors who placed money with struggling fund manager Neil Woodford face more pain, after his listed fund took another write-down on its investments.
Woodford Patient Capital Trust (WPCT.L) said in an update on Thursday that valuers had written down the fund’s investment in three companies. The write-down will knock 3.1p per share off the trust’s net asset value, equivalent to £33m. The written down basket of investments is now work around £590m.
Shares in the listed investment trust fell 4.6% at the open in London.
Woodford Patient Capital has now suffered three write-downs in the last five weeks, knocking a collective £105m off the trust’s net asset value. The series of write-downs comes on top of the trouble at Woodford’s Equity Income fund, a separate vehicle that was forced to suspend withdrawals in June.
Woodford blamed Thursday’s write-down on “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 three companies were not named but are understood to all be private. Woodford Patient Capital Trust is due to publish its half-year results next Monday, which may provide more detail.
The board of the Woodford Patient Capital Trust said in July that it was considering removing Woodford as manager of the trust and was holding conversations with other money managers.
Thursday’s write-down heaps more misery on investors who have placed cash with Neil Woodford. The former Investec money manager was once seen as one of Britain’s best stock pickers and struck out alone under his own name in 2015.
However, his funds have performed poorly since then and investors began pulling money at an accelerating rate in recent years.
Woodford was forced to suspend one of his flagship funds, the Woodford Equity Income Fund, in June after a liquidity crunch. Woodford had invested in private stocks in a bid to chase better-than-the-market returns but couldn’t sell his stakes in these businesses fast enough to meet redemptions. He was forced to freeze withdrawals to stop a fire sale of assets that would have hurt all investors.
Thousands of people, many of them retail investors, are now trapped in the Equity Income Fund, which had assets of about £3.7bn when it was frozen. An update at the start of the week revealed the fund’s value has declined by 12.8% since being frozen, while the FTSE all-share has risen more than 4% in the same period. The fund is set to stay frozen until at least December.
Woodford faced more bad news on Thursday after an update from Eve Sleep (EVE.L), one of his investments. The online bed retailer’s stock declined over 4% after it revealed an 8% slump in revenues during the first half of the year and a 13% fall in gross profits. Woodford owns around a third of Eve Sleep, which saw its stock crash 36% last week after a profit warning.
Despite the poor performance and gating of his fund, Woodford has continued to charge management fees on his frozen fund. The move has drawn criticism from industry figures and MPs.
Oscar Williams-Grut covers banking, fintech, and finance for Yahoo Finance UK. Follow him on Twitter at @OscarWGrut.