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More pain for Neil Woodford investors with £42m write-down

Oscar Williams-Grut
Senior City Correspondent, Yahoo Finance UK
Fund manager Neil Woodford. Photo: YouTube/Woodford Investment Management

Stricken fund manager Neil Woodford has suffered another write-down on one of his investments, heaping more misery on investors who follow the once star fund manager.

Woodford Patient Capital Trust (WPCT.L), the listed part of Woodford’s investment business, said late on Thursday that valuers were writing down the value of one of its investments.

Link Fund Solutions, which audits the portfolio, cut the value of an unnamed portfolio company by about £42m, knocking 4p per share off the investment trust’s net asset value.

Woodford Patient Capital Trust said it could not name the company or the reason for the write down due to “confidentiality obligations”. Yahoo Finance UK understands that the write-down is related to news or developments at an investment company that have not yet been made public.

READ MORE: Embattled Woodford's problems continue as fund takes £30m hit

Woodford Patient Capital Trust said it would “provide a further update to the market when able to do so.” Shares fell almost 7% at the opening of trade on Friday but were trading down 3.9% at 43.49p by 9.15am.

The investment write-down is the second at the investment trust in two months. £30m was knocked off the value of Woodford’s Industrial Heat holding last month.

The latest write-down extends the run of poor performance for Neil Woodford, who was once seen as one of Britain’s most savvy money managers.

Woodford was forced to halt withdrawals from his Woodford Equity Income fund in June after a liquidity crunch. The fund had invested in unlisted company stock and was unable to sell them quickly enough to meet redemptions.

Investors’ £3.7bn is still trapped inside the fund and Woodford continues to charge management fees. The freeze, which is ongoing, has sparked criticism from regulators and provoked an investigation by MPs. Bloomberg reported earlier this week that Woodford has lost £43.5m offloading Equity Income Fund investments in a bid to increase liquidity.

READ MORE: Woodford fund freeze 'undermines trust' in whole industry

Public companies Woodford has backed have also run into trouble recently.

Burford Capital, one of his flagship investments, has lost 40% of its value after being targeted by a US short seller.

Four of his investments listed in Guernsey have also been de-listed during the freeze, adding to the Equity Fund’s liquidity issues. Investments in biotech have also performed poorly.

Eddie Stobart, another Woodford investment, suspended its shares and announced its chief executive was leaving amid an accounting scandal.

IP Group, a listed investment company backed by Woodford, said earlier this week that Woodford’s involvement was hurting performance. Shares fell 9%.

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.

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Oscar Williams-Grut covers banking, fintech, and finance for Yahoo Finance UK. Follow him on Twitter at @OscarWGrut.

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