The support from investors for the Woodford Patient Capital Trust has been quite incredible.
We have always wanted to minimise the chances of scaling back applications. This was a key reason why the Board recently took the decision to increase the share issuance to £800m. However, investor appetite was not the only factor we and the Board had to consider: it was very much a balancing act between the amount of capital raised and the Trust’s investment rationale and remit.
We needed to select an appropriate figure well within the level needed to manage the investment strategy and deploy capital in the 1-2 year period outlined in the original prospectus. The Board, in close consultation with Neil and his team, concluded that £800m was the optimum figure.
The level of investor appetite has exceeded our expectations and as a result the issue was just under 10% oversubscribed. As a result, applications have been scaled back in accordance with the terms set out in the prospectus. The level of scale back is far lower than would have been the case if the size of the issue had not been increased by £300m on 9 April 2015.
A look at conventional investment trust launches over the past couple of decades or so shows that a capital raise of more than £500m has been an extremely rare event. So to raise more than £800m to invest in a previously overlooked asset class is a tremendous endorsement of the patient capital strategy.
The Trust has struck a chord with investors and triggered healthy debates whether on our innovative fee structure or on our decision to publish a supplementary prospectus. I’d expect those debates to continue, but for now Neil and his team – with more than two-dozen early-stage and early-growth stocks in the pipeline – are looking forward to putting your money to work.