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

Oscar Williams-Grut
Senior City Correspondent, Yahoo Finance UK
British fund manager Neil Woodford. Photo: Jonathan Atkins/Reuters

Shares in under-fire money manager Neil Woodford’s listed fund crashed 10% on Friday after one of its key investment’s faced a £30m write-down.

Woodford Patient Capital Trust (WPCT.L) announced on Friday morning that independent assessors had written down the value of its investment in Industrial Heat, a startup developing new energy sources including cold fusion.

Industrial Heat is one of Woodford’s biggest investments. It has attracted scepticism, with the Financial Times saying in June that Industrial Heat is based on “an idea on the fringes of modern physics.”

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

Woodford Patient Capital Trust said write-down is based on “a reassessment of the current progress of the business.” It will affect the company’s net asset value by about 3.4p per share, or about £30m. Woodford Patient Capital Trust’s total net asset value is £710m.

Shares in the trust collapsed by over 10% when trading started in London on Friday. At 8.40am, shares were down 7.7% to 40.50p.

The devaluation adds to the mounting problems facing embattled Neil Woodford. Once seen as one of Britain’s best money managers, he was forced to halt withdrawals from his Woodford Equity Income fund in June after a liquidity crunch. The freeze, which is ongoing, has sparked criticism from regulators and provoked an investigation by MPs.

READ MORE: Funds like Woodford 'built on a lie' and 'fundamental questions' ignored

Woodford’s run of bad news has continued since the gating of the Equity Income fund. Burford Capital, another 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.

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

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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