Woodford Concerns

Reaper

I'm sure you will all be shocked and surprised (not) to hear Woodford Patient Capital has slashed the valuation on Industrial Heat by £45m. That's on top of the £30m writedown in August.

It's current value is just £14m and many will feel even that is too much. It also affects Woodford Equity Income

https://citywire.co.uk/funds-insider/news/woodford-investors-suffer-further-blow-as-industrial-heat-slashed/a1289676

jimjames

Was thinking about how all this has happened at Woodford when he had such a successful previous career at Invesco.

I wonder if the move from a large institution where there are significant, standard rules on trading/holdings and process to setting up his own outfit where those processes/rules are whatever he wanted them to be was the final straw.

With a large investment house I suspect the ability to bend the rules to allow investment in whatever he wanted would be seriously limited so he would have been protected from a lack of discipline and going off track.

One of the big dangers of star managers setting up on their own.

Reaper

Yes with hindsight it seems Invesco were reigning him in and preventing him doing whatever he wanted.

He was frustrated with that so set up on his own which meant he could go wild, and did.

talexuser

See

https://forums.moneysavingexpert.com/showpost.php?p=76452182&postcount=1559

I assume these are genuine quotes from other managers with stature and not the journalist making things up (Boris anyone?)

Moe_The_Bartender

Citywire reporting this afternoon:

A consortium of life sciences investors is poised to enter exclusive talks to buy a £500 million portfolio of Woodford Equity Income's unquoted and hard-to-trade healthcare stocks, according to Sky News.

The consortium, led by WG Partners, could enter a period of exclusivity within which to conclude a deal as early as today, with an agreement likely to take a number of weeks to conclude, Sky News reported.

It is not clear how much WG Partners is offering for the portfolio, though its initial bid is understood to have been around 20% below the level at which the Woodford Equity Income fund is valuing them.

The size of the bid and its success will be crucial in determining how much Woodford Equity Income investors receive in distributions once the wind-up process begins.

The first distribution, expected at the end of January, is likely to be the largest, featuring the proceeds of the sale of the fund's larger listed stocks by BlackRock.

The proceeds from the sale of unquoted and hard-to-trade stocks, which is being led by private equity specialist PJT Park Hill, are expected to be distributed after that date.

The portfolio WG Partners is eyeing features a number of the £3 billion fund's unquoted positions, such as Oxford Nanopore, Immunocore and Kymab.

Smaller listed stocks which would be hard to offload in the market are also included. Rutherford Health (RUTH.NXX), whose shares have traded only minimally since listing on the NEX Exchange in February, features in the portfolio, as does 4D Pharma (DDDD), Mereo Biopharma (MPHM), Arix Bioscience (ARIX) and Verseon (VERS).

But it excludes the fund's second-largest unquoted healthcare holding, Benevolent AI, whose value was halved in September in a funding round lead by Singaporean state fund Temasek.



I have no personal interest in Woodford funds but would probably feel a sense of relief if I got 80p in the £ on these investments.

Thrugelmir

Moe_The_Bartender wrote: »

I have no personal interest in Woodford funds but would probably feel a sense of relief if I got 80p in the £ on these investments.

Vultures circling picking the meat off the bones. No sentiment when it comes to buying illiquid investments.

AnotherJoe

Thrugelmir wrote: »

Vultures circling picking the meat off the bones. No sentiment when it comes to buying illiquid investments.

80p in the pound for something Woodford has valued sounds like too much to me. Not so much vultures, more parrots.

ffacoffipawb

AnotherJoe wrote: »

80p in the pound for something Woodford has valued sounds like too much to me. Not so much vultures, more parrots.

More like lemmings perhaps?

Brian65

AnotherJoe wrote: »

80p in the pound for something Woodford has valued sounds like too much to me.

Indeed. I wish I could multiply the paper valuation of loss-making companies and charge increased fees on them like Woodford did.
I heard the latest devaluation has put WPCT above its debt ceiling, and their overdraft expires in January.

Reaper

It's Link Fund Solutions who do the valuations and I think they ought to be answering some serious questions.

Sep 2018 Industrial Heat valuation increased 357% because of technological progress and more funding
Nov 2019 Industrial Heat valuation slashed for the 2nd time because of a "delay in operational progress".

So in just over a year they went from making great progress to lack of progress.

I guess when you are trying to get pigs to fly its hard to judge how much closer you are to your objective.