Quantcast
Menu
Save, make, understand money

Experienced Investor

Woodford’s Patient Capital Trust to issue more shares

Joanna Faith
Written By:
Joanna Faith
Posted:
Updated:
11/08/2015

Neil Woodford’s Patient Capital Trust is to issue new shares to meet demand from investors.

The amount to be issued could be as much as 10% of the share capital (around £80m), though it is yet to be clarified how many new shares will be issued.

The trust is currently trading at a premium of 15% above the net asset value (NAV) of the portfolio.

Its share price fell 3% on the news.

Laith Khalaf, senior analyst at Hargreaves Lansdown, said: “Woodford is opening the door to new capital being squeezed into his investment trust. New shares will be issued at a price above the net asset value of the trust, but below the market price, giving new investors a sweetener while building up the underlying value of the fund.

“This move will exert downward pressure on the premium and, in the short term, the share price. However existing shareholders stand to benefit from the extra cash harvested from new investors, provided it is put to good use.”

The announcement accompanied the trust’s first half yearly report, which also revealed full portfolio holdings, together with a review of performance.

“Woodford’s portfolio is unsurprisingly dominated by smaller healthcare and biotechnology stocks, which he hopes will be the authors of tomorrow’s game-changing drugs and medical treatments. He also holds some blue chip names too, including AstraZeneca and GlaxoSmithKline, which have hindered rather than helped performance to date,” said Khalaf.

“Investors are already sitting on a 15% profit, but so far this has largely been driven by the popularity of the trust itself, rather than a result of hard yards gained by the underlying companies.”

When the trust debuted on the London Stock Exchange in April, it was the largest ever investment trust launch in UK history.

[article_related_posts]