Woodford Concerns

jamei305

Schroders are to pick up WPCT and run with it, with added fees. I wonder what they will do with Industrial Heat.

AnotherJoe

jamei305 wrote: »

Schroders are to pick up WPCT and run with it, with added fees. I wonder what they will do with Industrial Heat.

Well, even though winters coming, they won't be using its technology to heat their offices, that's for sure

AnotherJoe

I see the Greater Fools are out buying today. NW created a pile of poo, people sold it, someone else bought the pile of poo, and all of a sudden it's coming up roses ? Maybe Schroeders should take this moment to flog IH before the penny drops.

Sailtheworld

AnotherJoe wrote: »

I see the Greater Fools are out buying today. NW created a pile of poo, people sold it, someone else bought the pile of poo, and all of a sudden it's coming up roses ? Maybe Schroeders should take this moment to flog IH before the penny drops.

I wouldn't put my money in IH but Woodford didn't make a secret of his fund's investment so I assume people buying his fund were really keen to get in at ground level on the next big thing.

That assumption is based on how Woodford investors are taking it on the chin obviously realising not every investment can be the next Microsoft or Google.

I didn't watch the TV show but I imagine it got a bit boring with people saying 'you win some; you lose some'.

bowlhead99

Sailtheworld wrote: »

It's a generalisation but I think, in the main, the fund industry is aimed at people who buy premium unleaded i.e. those willing to pay a little more for effectively the same thing.

x% more per litre at the pump, y% more miles per gallon if your car is designed to adjust for it.

AnotherJoe wrote: »

I see the Greater Fools are out buying today. NW created a pile of poo, people sold it, someone else bought the pile of poo, and all of a sudden it's coming up roses ? Maybe Schroeders should take this moment to flog IH before the penny drops.

Direct private equity is a pretty tiny part of Schroeders's business and generally the PE (ex-Adveq) part of their business invests in fund-of-fund situations or in coinvestments alongside other lead managers. But as it's not all unquoted and the unquoted holdings generally aren't control positions I suppose it makes sense that the appointee isn't a pure private equity buyouts business.

As a holder I'm pleased the performance fee structure isn't too aggressive but perhaps when they get their feet under the desk they will wish they had asked for more

The 'coming up roses' is often seen on stocks where there is a short term issue (manager with poor reputation quits or is fired with no immediate replacement) that gets resolved (new person appointed). There is still the overhang of WEIF's shares in WPCT needing to be dumped in the market. If a bit of confidence can be restored to the price first, perhaps they can be placed away at something closer to eventual NAV (whatever that may be), but unlikely to happen any time soon.

AnotherJoe

Sailtheworld wrote: »

I wouldn't put my money in IH but Woodford didn't make a secret of his fund's investment so I assume people buying his fund were really keen to get in at ground level on the next big thing.

Scientifically illiterate people assuming that a fund manager with a team behind him will know what they are doing, a reasonable assumption. Whereas in fact it was the jumping the shark moment.

Sailtheworld wrote: »

That assumption is based on how Woodford investors are taking it on the chin obviously realising not every investment can be the next Microsoft or Google.

The issue is, those that might be are having to be sold to finance running costs leaving an ever increasing % of dross. Not that there were actually were many true "moonshot" stocks there in the first place.
Anyway I think I'm going to duck out of this now, time will tell how it plays out, in particular if Schroeders dump Link and do the valuation themselves or at least get someone else in that doesn't have a vested interest in maintaining their the old valuation. I think there's going to be a lot of !!!!!! going on when it's revalued. And maybe another lawsuit aimed at Link.

Brian65

Up 27%.
Can't see why - It was already known someone else would be taking it over
So whats new?

Sailtheworld

bowlhead99 wrote: »

x% more per litre at the pump, y% more miles per gallon if your car is designed to adjust for it.

Almost all cars are designed to work perfectly adequately on unleaded with premium unleaded delivering no benefits whatsoever. It's a product for people with high performance cars, mugs or to catch out the people, like me, who fill up with it by mistake.

The point I'm making is the fund industry is designed for people who don't mind paying more for something which can be purchased for less. If you don't like the super unleaded analogy I'm sure there are plenty of others that will work. There are plenty of people who pay a premium for added value when that added value is nothing more than a perception. It's how branding works and it applies to the financial industry too.

Brian65

Sailtheworld wrote: »

There are plenty of people who pay a premium for added value when that added value is nothing more than a perception. It's how branding works and it applies to the financial industry too.

Their favourite saying is 'You get what you pay for'
There can't be any scams or rip-offs on their planet.

eskbanker

Sailtheworld wrote: »

The point I'm making is the fund industry is designed for people who don't mind paying more for something which can be purchased for less. If you don't like the super unleaded analogy I'm sure there are plenty of others that will work. There are plenty of people who pay a premium for added value when that added value is nothing more than a perception. It's how branding works and it applies to the financial industry too.

Buying sensibly-diversified funds instead of the underlying equities eliminates the need for the purchaser to conduct vast amounts of research, massive volumes of individual transactions and then all the ongoing rebalancing. If/when all that activity is properly costed, it would astonish me if the fund model came out more expensive than the deconstructed equivalent....

I'm not claiming that all funds are equal value for money though!