Woodford trust trades at premium after record fundraising

Δημοσιεύθηκε: 24 Απριλίου 2015 - 17:50

Neil Woodford's new investment trust is trading at a premium of more than 4 per cent after raising a record £800m for its initial public offering.

The Woodford Patient Capital Trust, which will focus on early-stage companies, launched on April 21 after subscribers were told their applications would be scaled back by 10 per cent because of the level of interest.

The micro-cap fund's mandate differs widely from that of the equity income funds Mr Woodford has traditionally run, and his company, Woodford Investment Management, said that investors should commit their money for at least five years.

John Newlands, head of investment companies at the wealth manager Brewin Dolphin, said his company had invested £18m in the trust and labelled the launch a "staggering success".

"This goes far beyond any desire by Neil to prove a point in investment performance terms. It's very much his own personal crusade to improve the way that businesses are financed in the UK," he added.

Mr Woodford, a popular UK equity manager with a high profile among retail investors, made his name during 30 years at Invesco Perpetual before setting up his own firm last year.

Mark Dampier, head of investment research at Hargreaves Lansdown, said: "The launch of this relatively small and niche trust would pass most people by if it weren't for Woodford being at the helm.

"Everything Woodford does continues to attract high levels of investor interest and this latest launch is no exception."

A rare naysayer was Hawksmoor Investment Management, a discretionary manager, which labelled the levels of interest in the trust "real bull market stuff".

"What was a cracking off-the-wall idea at £200m has become a victim of its own success," said Jim Wood-Smith, Hawksmoor's head of research, adding that his firm would not be investing.

However, he praised the "innovative and enticing fee structure", in which the trust will charge only a performance fee rather than the usual percentage-based management charge.

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Once it is fully invested, which the company says will take up to two years, the trust will hold 75 per cent in early-stage and early-growth companies, with the rest in mature stocks; the income from these will be used to pay the trust's running costs. It will aim for returns of 10 per cent a year.

One of its first investments is in Sphere Medical, an Aim-listed diagnostics company, which told the stock market Woodford would commit £4m to a share placing, resulting in a 17.2 per cent stake.

Mr Woodford said the firm had about 30 ideas "ready to go" following the launch but would not reveal most of them until the capital was deployed.

Its launch will be followed next week by that of a micro-cap trust run by Gervais Williams, a noted small-cap manager at Miton Group.

Mr Newlands said he was also considering investing in that trust, which is seeking to raise £100m.

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