New Woodford Fund

InvestInPoker

No doubt received a lot of money last couple of days into new ISA allowances. I have made my application and hope they wont scale anything back.

bowlhead99

Yes, got that too.

£200m target implied £100m of early stage (pre-revenue, pre profit) and £50m of early growth within the portfolio - obviously intending to grow those figures over time.

But £500-800m would seem more challenging to deploy. If they raise close to the hard cap, at say £750m, and equity markets continue to do ok for next few years they will soon be in the position where they need to have half a billion in early stage venture capital, and that seems like it would be somewhat harder to spend if you are genuinely only focussed on the "best and brightest" opportunities.

I think it makes the offering less compelling, given we have little in the way of published hard facts about the team's track record in these specific target markets, other than the mention of some very high level details of four portfolio companies held for one to four years at time of publishing the prospectus.

If they hit £800m I won't mind too much if I get scaled back as I think it will make the fund less attractive and I would be less confident in their prospects. For them, they would prefer to take performance fees on 800m for delivering 11% IRR instead of just earning fees on £200m invested after delivering 12%. For me, I would prefer they focussed on getting the 12%.

tg99

Yep similar thoughts here in terms of upping the issue size, could mean they have to diversify amongst more companies and thus hold some positions that might not have been quite attractive enough to hold otherwise.

Also poses interesting question on how much to apply for. My existing strategy was to apply for more than I wanted given the view that I thought it would likely raise a decent amount (for reasons posted already in this thread) and did not expect it to raise the issue size, hence meaning there was a fair chance it would trade at a premium to nav so even if I was not scaled back I could then exit any part of my holding I did not want to retain at breakeven or better. Obviously raising the issue size means some of the potential post issue demand that would have pushed up the price will now be satisfied pre issue hence less of a jump than otherwise might have been. On balance, still think there is a decent chance it will trade close to nav or better given demand so may just stick with my existing strategy.

bowlhead99

Remember it has issue costs and hence a mild premium to NAV may only be break even against your initial buy in price. And there may be people like you who bought more than they wanted expecting to be downsized or expecting an initial premium due to oversubscription, and rush for a quick exit when that doesn't transpire.

So if they are broadening the initial offering to let everyone get their desired allocations you may not see a premium at all. Inevitably there will be some who don't buy in at launch who do want a piece of the action based on manager reputation, so no reason to suspect it will move to a discount, even though the portfolio will take a couple of years to construct - but smallcap investment trusts aren't on massive premiums at the moment.

I probably said in an earlier post, I'm just applying for what I'd be happy to keep long term, with no strategy to expect to be able to "cash in" on a potential premium and no real expectation to be downsized - though not a big deal if I am. Obviously a crazy initial premium would be great, as you could cash out and wait for the froth to blow off, but you would be a gambler if the only reason you applied for a high amount was short term speculation.

This isn't a Royal Mail IPO - you are literally paying a pound for a share of an investment company bank account with less than a pound in it. The implicit premium to the day zero NAV of 98p, is what you pay for the privilege of a famous name manager with a blank slate to go and make you some money. If everyone can buy as much of that as they want by putting the orders in over the next week or so, you shouldn't expect the premium to rocket after launch.

masonic

bowlhead99 wrote: »

I probably said in an earlier post, I'm just applying for what I'd be happy to keep long term, with no strategy to expect to be able to "cash in" on a potential premium and no real expectation to be downsized - though not a big deal if I am. Obviously a crazy initial premium would be great, as you could cash out and wait for the froth to blow off, but you would be a gambler if the only reason you applied for a high amount was short term speculation.

This is exactly my thinking as well. I'd rather be under allocation than over allocation and I'm sure there will be an opportunity to top up at a favourable price at some stage if necessary.

tg99

Yep fair points and no intention of playing this as a short-term opportunity to capture a premium; if it ends up trading at a discount and I get more than I ideally want then I am happy to hold the slightly larger holding long-term as needed and make slight adjustments to my existing small cap / AIM / pe / Woodford fund exposure as needed. Can't see the premium being anything more than a few percentage points max especially once taking into account the issue costs and the increased offer size.

TCA

Anybody interested in the Miton UK MicroCap Trust IPO?

http://www.mitongroup.com/index.php/private-investors/funds/investment-trusts/growth/uk-microcap-trust-plc/#

colsten

I put both, my 2015-16 ISA and SIPP allowance forward for the new Woodford Fund because I was excited about it and it's only a small part of my investments.

I had hoped to get my requested allocation but was prepared to take a sharp cut. The amended prospectus throws my entire thinking regarding this investment right up in the air.

This could be no less than an elaborate scam on innocent investors. Give your investors 20-odd years of great performance, capture their minds, scam them out of billions when they least expect it. You are still young and virile and you own your caribbean island by now, so you are safe from any prosecution. Smarter than Madoff and Leeson, get away with it without being caught.

I'll have to sleep over it a couple of times, but I am very tempted to totally withdraw my offer for this fund.

mike88

colsten wrote: »

I put both, my 2015-16 ISA and SIPP allowance forward for the new Woodford Fund because I was excited about it and it's only a small part of my investments.

I had hoped to get my requested allocation but was prepared to take a sharp cut. The amended prospectus throws my entire thinking regarding this investment right up in the air.

This could be no less than an elaborate scam on innocent investors. Give your investors 20-odd years of great performance, capture their minds, scam them out of billions when they least expect it. You are still young and virile and you own your caribbean island by now, so you are safe from any prosecution. Smarter than Madoff and Leeson, get away with it without being caught.

I'll have to sleep over it a couple of times, but I am very tempted to totally withdraw my offer for this fund.

We all knew, or should have known, of the possibility of the issue size increasing and for that reason the above post with suggestions of a Ponzi scam is totally over the top. The prospectus warned of the possibility of the initial offering increasing in size and that is precisely what is going to happen.

OK so the investment is less attractive as a result of this development but that is a risk we were informed about from the start. I'm sticking with it.

Broken_Biscuits

with so many unknowns attached to this, the old saying only invest what you can afford to lose certainly applies here. if this whole thing ends in tears i can accept the hit on the amount i have put in.