Transfer of unquoted assets

Important Information

We want to make investing with us simple and straightforward for all of our clients.

Please select your investor type from the options below.

Alternatively you can register or log in to an existing account.

Please note that by making your selection here you are agreeing to the Woodford Investment Management Ltd Privacy Statement and to our Terms and Conditions.

Mitchell Fraser-Jones 1 March 2019 Est. reading: 3 min read

We wanted to let you know that the LF Woodford Equity Income Fund (the fund) has transferred some of the portfolio’s individual unquoted stocks to Woodford Patient Capital Trust (the trust) in exchange for shares in the trust. This step signals the start of a strategy to switch the fund’s unquoted exposure from individual unquoted holdings to shares in the trust.

Which unquoted positions have moved across?

Atom Bank, Carrick Therapeutics, Cell Medica, RateSetter and Spin Memory have transferred from the fund to the trust. All of them are existing positions within the trust portfolio. The combined value of these assets is £72.9m. A further £6.0m in cash has also transferred from the fund to the trust, to meet the anticipated capital requirements of these assets over the next twelve months.

Why have you chosen these particular stocks?

We have selected from a list of positions in which the trust already has a holding, and have avoided stocks where we believe there is a known likelihood of an imminent milestone being reached that would trigger a near-term valuation change. Indeed, an additional valuation report was commissioned by the trust’s board which, as required under the Companies Act, independently verified the reasonableness of the valuations of the five stocks transferred.

Furthermore, several of the larger unquoted positions within the fund are also already well-represented within the trust portfolio. As these businesses are typically at a more mature stage of their growth cycle, other forms of corporate activity could arise in the short-to-medium term that would further reduce the fund’s aggregate exposure to unquoted securities. Evidence of this was provided yesterday by Proton Partners International, which has listed on London’s NEX Exchange Growth Market. The acquisition of the selected assets allows the trust to increase its position to companies that the board views as the “the second-wave of global disruptors”.

How has the transfer taken place?

The trust has acquired this portfolio of assets for £78.9m (including the cash element) through the issuance of 81,639,238 new ordinary shares. The shares have been issued to the fund at a price of 96.67 pence per share which is equal to the net asset value (NAV) per share as at 27 February 2019, plus the costs associated with the transaction.

In buying the shares at the trust’s NAV, the fund is buying its stake in the trust at a premium to the prevailing share price. We have explored how much it would cost the fund to purchase the equivalent position in the secondary market and our analysis suggests it would cost considerably more and take significantly longer, than buying at NAV in this way. The fund is paying what the trust’s assets are actually worth and we are doing this with the belief that the assets will significantly appreciate over the medium-to-long term.

Why have we transferred these unquoted holdings?

This step signals the start of a strategy to switch the fund’s unquoted exposure from individual unquoted holdings to shares in the trust. Neil is as passionate on the unquoted asset class as ever but having listened to feedback from clients we believe that moving the exposure to the asset class via a collective fund rather than individual unquoted stocks makes sense – both operationally and from an investor view.

Furthermore, in making this move, which coincides with the LF Woodford Income Focus Fund moving from the IA Specialist sector to the IA UK Equity Income sector, we believe we have a more clearly defined product set, making investor choices easier to make:

Woodford Investment Management Ltd is authorised and regulated by the Financial Conduct Authority (firm reference number 745433). Incorporated in England and Wales, company number 10118169. Registered address: 27 Old Gloucester Street, London, WC1N 3AX.

© 2020 Woodford Investment Management Ltd.
All rights reserved.

Are you sure?

By disagreeing you will no longer have access to our site and will be logged out.

Privacy Preference Center

Experience Tracking

Lets our analytics service track you across our different websites and enables data sharing among our different marketing tools.

AMCV_[Tracker ID]@AdobeOrg (Adobe), [Tracker ID]@AdobeOrg (Adobe)
Adobe Analytics (helps us provide you with more relevant experiences and content based on your likely interests). Cookies: demdex, dextp, dpm, DST, DSTJS
Twitter personalisation (by better understanding how devices are related, Twitter can use information from one device to help personalize the Twitter experience on another device). Cookies: personalization_id
Heap Analytics (provides metrics on user behaviour and actions throughout the site). Cookies: _gid, _hp2_id.[Tracker ID],_hp2_props.[Tracker ID], _ga, _mkto_trk, optimizelyBuckets, optimizelyEndUserId, optimizelySegments, raygun4js-userid, _attribution_referrer, _csrf
Adobe Analytics (provides you with more relevant experiences and marketing messages based on your likely interests). Cookies: _tmae ,ev_sync_dd,ev_sync_yh,everest_g_v2,gglck

Traffic Metrics

Allows Woodford to aggregate information on website usage and popular content

_ga, _gid
Google Analytics (tracks and reports website traffic and user behaviour): Cookie: CONSENT
New Relic (application and server performance monitoring – allows us to spot problems with our website code and improve them to keep things running smoothly). Cookie: JSESSIONID
Adobe Analytics (provides you with more relevant experiences and marketing messages based on your likely interests). Cookies: __qca,__smToken, _ga, _mkto_trk, _rtbmedia

Search History

Populates the 'recent searches' section of the website navigation.


Close your account?

Your account will be closed and all data will be permanently deleted and cannot be recovered. Are you sure?