You are here: Home - Investing - Experienced Investor - News -

Schroders to take over Woodford Patient Capital Trust

0
Written by: Emma Lunn
24/10/2019
Schroders will take charge of the embattled Woodford Patient Capital Trust (WPCT) following Neil Woodford’s departure last week.

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.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

The savings accounts paying the most interest

If one of your jobs this month is to get your finances in order, moving your savings to a higher paying deal i...

Coronavirus and your finances: what help can you get?

News and updates on everything to do with coronavirus and your personal finances.

Everything you need to know about being furloughed

If you’ve been ‘furloughed’ by your company, here’s what it means…

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

Read previous post:
Google crackdown on exploitative debt service ads

The search engine will restrict debt services advertising to firms meeting new accreditation standards.

Close