I might be the only one crazy to think, I should buy some. Heâs going to rebalance the portfolio to less volatile assets. Ideal scenario, trading resumes, fund drops 5-10% more. Then hopefully I can pick up some.
2 Likes
I believe that if the fund was an investment trust instead, then this issue would not have occurred. The most that would have happened is that the share price would have fallen considerably (I guess thatâs not a much better result for an investor though).
The problem is that the Woodfood fund would need to sell assets in order to pay the requested redemptionâs - which is not easy for that high a withdrawal. They may have anticipated this issue, as a few months ago some of the less liquid investments were moved into the Woodford Patient Capital Investment Trust and the Fund took shares in the IT in return.
2 Likes
Entirely agree. If the fund was an investment trust it is closed ended i.e., the capital can not be withdrawn. Holders of shares can sell to one another holder but the fund remains the same size (subject to the value of its holdings moving up and down). Now, however, there is a contagion effect from the open ended fund to the closed ended trust as (I) the business and Woodfordâs brand are challenged and (ii) there is a high degree of cross holding between the two funds so a forced seller (the open ended fund) is likely to bring down the valuation of the holdings. This morning the trust looks like it is opening well down which could increase the discount to NAV (the discount the shares traded to the last mark to market value of the assets) from about 15 (longer term average has been about 12) to something closer to 30%.If you like the underlying investments and have a long time horizon this could be interesting. I donât know much about his private equity type holdings but I believe the information is out there and this may be the only way to access many of them.
edit: note the open ended fund also owns some shares in the investment trust from the transfer of some illiquid assets earlier this year.
3 Likes
Agreed - itâs also compounded by the requirement to keep his illiquid holdings in his Equity Income Fund below 10% (it is around 14% currently) in order to actually qualify as an Equity Income Fund. With redemptions heâs has to sell his positions, if he only sells his public equity holdings the % will increase in private equity, if he sells private equity quickly he will likely be selling below fair value. Heâs stuck, hence the block on withdrawals!
3 Likes
I jumped on the Woodford bandwagon in 2014 and invested when the price opened at £1⊠Exited in 2018 when they were around £1.34 as I was switching my funds to tracker ETFs, so I guess I was just fortunate.
Still tempted to chuck the odd quid at WPCT.
Relevant piece today. Might dip in tbh
https://citywire.co.uk/funds-insider/news/patient-capital-shares-plunge-11-on-woodford-fund-suspension/a1235262
If this goes any lower I might get involved for a speculative few shares
This is a really good summary of whatâs happened & a nice introduction to Neil Woodford, for anyone who doesnât know the backstory here.
also
2 Likes
Good read, thanks 
1 Like
Looks like the backlash against Hargreaves has begun
Google â If Woodford is a fallen superstar then Hargreaves was his agentâ to avoid the paywall
Also
Again google the title if you canât get the link to work
3 Likes
Neil Woodford explains why the fund suspended trading:
3 Likes
He should have made these comments sooner in my opinion.
1 Like
Patient Capital has just dropped a lot down 7% since 4pm (25 mins ago), 20% discount to NAV.
Been looking at this but wary of catching falling knives 
Yeah Iâm not making a recommendation either way haha thinks itâs linked to SJP removing their mandate
Woodford Patient Capital has some good holdings but everyday we get a new story documenting some Woodford fund falling. If it keeps going like this then it might be better for them to start dissociating WPCT from Neil Woodford. Unfortunately everything is built around Neil, so if heâs seen as having the Midas touch then itâs all good, but any downturn and then everything is blown out of proportion, even though they have a team of people working on the investment side.
Does anyone know how Kent County Council would go about purchasing ÂŁ250 million odd worth of units in the fund ?
Would they be protected only up to ÂŁ85,000 if their broker went bust or is it completely different ?
Itâs a big blow to him and his company for sure, ÂŁ3.5bn is a lot of money to be taking a fee from. This wouldnât effect his Equity income fund (the one available on HL) however.
1 Like