Following yesterday’s dramatic decision by fund administrator Link Fund Solutions to close the Woodford Equity Income Fund and remove Neil Woodford as manager, the former star manager resigned from the board of Patient Capital Trust (WPCT) last night.
In an announcement to the Stock Exchange, Patient Capital said that Woodford Investment Management has served notice that it was terminating its role as manager.
The trust is now ‘in advanced discussions in relation to the ongoing management of the company's portfolio and expects to be in a position to announce details of the new management arrangements shortly’.
The board of Patient Capital admitted as early as July that it had been holding preliminary discussions with a number of rival fund management firms so a decision should be fairly swift.
However investors, wary of the FTSE 250 trust being put into run-off and having to wait for their money, and no doubt spurred on by negative commentary from the analyst community, are piling out this morning sending the shares down another 7% to a new low of 31.8p.
Putting the fund into run-off is one option for a new manager, although given the trust’s closed-end structure it is in a better position than its open-ended sibling to manage down its mostly unlisted holdings in an orderly fashion.
If the trust is put into run-off it will need to repay more than £100m of bank debt before any money is returned to shareholders.
According to fund rating firm Morningstar, the last actual net asset value of the trust was 63.9p per share so in theory the discount at today’s price is 50% but any new manager is likely to have to write down the value of the assets nearer to market value.
