Woodford Concerns

kinger101

Look on the bright side.

If you money was invested in Woodford, it couldn't have been invested here

https://www.trustnet.com/factsheets/o/bef2/vt-garraway-absolute-equity-i-acc-gbp

masonic

kinger101 wrote: »

Look on the bright side.

If you money was invested in Woodford, it couldn't have been invested here

https://www.trustnet.com/factsheets/o/bef2/vt-garraway-absolute-equity-i-acc-gbp

Swings and roundabouts:

Thrugelmir

iglad wrote: »

Oh dear my little joke about past performance has been taken too seriously? oops!!

Who buys on historic data alone? Other than to provide reassurance for ones own decision. Buffett has underperformed for the past 10 years. No one slates him. Having a "good idea" is fine until everyone else copies it. Then envitably underperformance will follow.

iglad

masonic wrote: »

Swings and roundabouts:

This is a right old battle royal.

iglad

Thrugelmir wrote: »

Who buys on historic data alone? Other than to provide reassurance for ones own decision. Buffett has underperformed for the past 10 years. No one slates him. Having a "good idea" is fine until everyone else copies it. Then envitably underperformance will follow.

Oh dear.............

Moe_The_Bartender

From today’s Torygraph:

Neil Woodford's Patient Capital Trust has been forced to ask its lenders for greater flexibility after a sudden deterioration in asset values left it exposed to a possible breach of borrowing rules.

The trust’s current debt arrangements allow it to borrow up to £150m, or 20pc of net asset value (NAV), which limits how much it can borrow based on the value of both the quoted and unquoted holdings in the portfolio.

As of Wednesday, it had borrowings of £113.7m. Although that is less than the debt of £117.4m reported in July, the trust was left with a higher gearing position of 17.1pc of NAV, compared to 15.95pc.

Patient Capital Trust's lender, Northern Trust, has since agreed to give it greater borrowing flexibility while it works to dispose of certain unquoted assets, but demanded a veto over any new investments and a new rate of interest on the amount already drawn down in exchange.

So now his lenders have him by the dangly bits.

AnotherJoe

Possibly but I'm reminded of the old adage, if you owe the bank a million you're in trouble, if you owe the bank a billion, they're in trouble, and if you owe Neil Woodford money, start worrying.
Would anyone here lend Woodford a pound?
I don't know anything about Northern Trust but if I had shares in them, I'd be selling on account of their "security" must be shares that Woodford selected.

bowlhead99

Moe_The_Bartender wrote: »

So now his lenders have him by the dangly bits.

Investors (or potential investors) may previously have been concerned that the trust was close to breaking banking covenants, as the amount that can be borrowed under the facility was tied to the NAV of quoted and unquoted assets and they have various commitments for follow-on investments with certain companies. If the borrowing levels exceed the bank's allowed percentages of NAV for the two asset types (even if due to a decline in NAV rather than new borrowing), the trust could have been required to dump investments to quickly pay back the excess borrowing.

That concern has now been reduced, as they have told the bank they are aiming to dispose of certain unquoted assets and renegotiated the facility so they will have more flexibility around what happens if a NAV drop makes them go over for a while. The bank has agreed they can take extra borrowing for various existing commitments and the trust has agreed they won't make other new investments without agreeing them with the bank first.

After this was announced just after noon on Friday, the bid/offer ticked up and the afternoons trades were reported at a higher price than the morning's. So the market doesn't seem disappointed with the announcement.

As I mentioned yesterday:

bowlhead99 wrote: »

I note that WPCT has announced some negotiation of new arrangements in relation to its borrowing facility today: some greater flexibility around its borrowing base and a small tick up to Libor+1.50 from Libor+1.35%

You can characterise that as the lenders 'now having them by the dangly bits' if you like - but in reality, the market was previously worried about the bank already having them by the dangly bits with a car crash coming up ahead, and now that crisis has been averted.

talexuser

Moe_The_Bartender wrote: »

From today’s Torygraph:

A slight correction - for some time now it has been the Borisgraph

talexuser

The Sunday Borisgraph reports Kent Council have lost £36 million from their investment, the cashing in of which prompted the gating, based on latest valuations.

Councillors now complain about The "quality of financial advice" and "pension funds should not be a gamble" of "capital casinos" !! (my aside: how else pensions fund increases is not explained).

However it did not stop the superannuation fund discussing the investment in secret, when council business default should be open to the public.