Neil Woodford, once considered the UK’s brightest and best stock picker, is on the verge of being shown the door by the trust that bears his name.
The board of the Woodford Patient Capital Trust (WPCT) said it was speaking to other fund managers to potentially replace Mr Woodford, as it revealed that the value of the fund fell 20.9% between June 28 and September 26 to £591 million.
The fall follows a series of writedowns in the value of various unlisted companies in which Mr Woodford had invested customers’ money, as well as shares dropping in listed entities.
Customers in the fund were told in June that they would no longer be able to withdraw their money due to high levels of investors cashing out – although charges and fees continue to apply.
The company that oversees the Equity Income fund said resumption of customers being able to access their money will not be until at least December, but may stretch into the new year.
On Mr Woodford’s future, WPCT chairwoman Susan Searle said: “The board continues to evaluate the position of the portfolio manager (Mr Woodford) and, as previously announced, is talking to other potential managers.
“This process can take time and ultimately the board’s decision will be that which is in the best interests of protecting long-term value for shareholders.”
While shareholders can be forgiven for thinking there are no positives, I continue to believe that the majority of the businesses we have invested in are making good progressNeil Woodford
Mr Woodford apologised again for the problems at the fund.
He said: “Shareholders have endured an extremely disappointing six-month period, for which I am very sorry.
“While shareholders can be forgiven for thinking there are no positives, I continue to believe that the majority of the businesses we have invested in are making good progress, in line with our pre-agreed milestones.”
Revealing its half-year results, the company also said net asset value was £807 million in December last year, falling to £654 million by June 30 – a 26% decline.
Mr Woodford also highlighted some of the best and worst performing stocks, as part of an overview of the 20 top companies in the fund.
He said pharma businesses Immunocore and Benevolent AI have seen their values fall, but remained positive for their future.
But Precision Biopsy and Scifluor Life Sciences were written down significantly, “as it became clear that the funding options that both businesses had been pursuing were unlikely to come to fruition”.
In listed companies, other pharma firms Autolus and Mereo Biopharma have struggled on the stock market, Mr Woodford said, but there have been better performances from 4D Pharma, Evofem Biosciences and ReNeuron.
Since suspension, Mr Woodford has vowed to invest customers’ money in more stable, listed businesses, where shares are easier to sell – avoiding another liquidity problem.
There has been criticism of the fund over its investments in unlisted companies and attempts to circumvent the rules, which say investment vehicles should have no more than 10% of customers’ money in such businesses.
The Woodford fund had put many of its unlisted investments into a separate listed fund on the Jersey Stock Exchange, meaning that, technically, no rules were breached.