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Investors flock to Woodford Patient Capital despite fund freeze

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

Investors are flocking to one of high-profile fund manager Neil Woodford’s investment funds despite the ongoing crisis at one of his other funds.

Investment platform Interactive Investor said on Wednesday that its most widely bought fund in June was the Woodford Patient Capital Trust (WPCT.L).

Woodford displaced the Scottish Mortgage Investment Trust, which had been its number one fund every month bar one since February 2014. Woodford Patient Capital jumped six places to take the top spot.

The surge in interest came despite the ongoing saga at Woodford Equity Income Fund, one of the money manager’s other flagship funds.

READ MORE: Investors still stranded as Woodford's £3.7bn fund stays frozen

Woodford Equity Income was frozen on 3 June, meaning thousands of investors were unable to withdraw from a collective £3.7bn. The freeze came after a liquidity crunch caused by Woodford’s high-level of investments in illiquid assets, like stock in private businesses.

The fund freeze has sparked an official investigation by the Financial Conduct Authority and dealt serious damage to Woodford’s reputation.

“While there remain lots of questions about Woodford’s stock selection and valuation, some of our investors are clearly taking the view that some of the companies held in this trust may be big winners in the future, and that the current huge discount is therefore potentially attractive,” Moira O’Neill, head of personal finance at Interactive Investor, said.

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

Woodford Patient Capital has seen its share price decline since the Equity Income fund was frozen and the share price is now at a 30% discount to the fund’s net asset value.

“Time will tell whether the investors who bought into WPCT last month were catching a falling knife or whether they have bought in at a great time,” O’Neill said.

Last week Woodford Patient Capital moved to reassure investors and prop up its share price by pledging to reduce debt, put in place extra supervision measures, and shake-up its board.

Read more on the Woodford Equity Income fund freeze: