Schroders has announced that it will become portfolio manager for Woodford Patient Capital Trust by the end of the year. It plans to rename the trust to Schroders UK Public Private Trust plc.

Schroders says it intends to manage the portfolio in line with the trust’s existing investment objective and policy. The trust will be managed by teams within Schroders’ private assets and equities departments, led by head of European private equity Tim Creed, and head of data insights and research innovation Ben Wicks.

Shares in WPCT surged over 28 per cent this morning following the news.

Woodford quit as manager of WPCT last week and closed Woodford Investment Management after administrators shut down his flagship Woodford Equity Income Fund.

WPCT’s share price has sunk 60 per cent since May with Woodford at the helm, and the trust had announced in July in was in talks with other managers to replace him.

However the fee structure of the trust will change under its new management. Woodford had not taken a fee since launching the trust in 2015 because the charging structure was performance-based and required the manager to deliver net asset value growth of at least 10 per cent in a year before taking any fee – Woodford never achieved this.

Schroders won’t take a management fee for three months, but will charge 1 per cent a year after that on the first £600m of assets, falling to 0.8 per cent on assets above this level.

From 1 January 2023 Schroders will also be eligible to take a performance fee of 15 per cent of any excess returns above a net asset value (NAV) per share of 77p. The reported NAV was 63.2p as at 22 October 22 2019.

Moira O’Neill, head of personal finance at Interactive investor, said: “Beleaguered Woodford Patient Capital Trust shareholders finally have something to be happy about with news that Schroders have been appointed the new portfolio manager and that the trust is going to be run with the same existing investment mandate. The majority of Patient Capital Trust investors are likely to have been actively interested in the early stage companies and it would have been very painful for investors if the trust had been wound up or its objective changed.

“The other fear had been that a new manager would dramatically increase the fees, but Schroder’s have been fair on this. The proposed performance fee has high hurdles and while performance fees are generally not well liked by investors, given the current situation it is reasonable.”

Adrian Lowcock, head of personal investing at Willis Owen, said: “This is as good an outcome as possible for shareholders in the trust and will draw a line under the Woodford saga. Schroders is a well-respected FTSE 100 listed fund management group, with broad resources dedicated to the specialist sectors in which the trust is invested. While the new managers are likely to want to make some changes, as they implement their own stock-selection process, we believe the philosophy of backing early stage innovative companies to reach their full potential will remain the same.”