InvestmentsAug 11 2015

Woodford Patient Capital to raise up to £80m via tap issue

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Neil Woodford’s Patient Capital investment trust has announced plans for a tap issue fundraising after reporting its inaugural set of interim results.

The trust, which raised £800m from investors earlier this year, saw its NAV rise by 3.1 per cent between listing on April 21 and the end of June, the company said today.

Patient Capital was trading on a premium to NAV of 11.4 per cent as of June 30, reflecting the team’s “strong reputation” as well as demand from index trackers as a result of its entry into the FTSE 250, chairman Susan Searle said.

As a result, the board will implement a tap issuance programme to satisfy excess demand in the secondary market, issuing shares at a premium to NAV. The trust is able to issue up to 10 per cent of its NAV via the programme.

Mr Woodford said more than 75 per cent of the initial funds raised have now been deployed. The company expects to be fully invested by the end of 2015.

Early performance has come as a result of smaller companies such as US biotech firms Prothena and Northwest Biotherapeutics, the manager added.

The companies were two of the largest positions in the Patient Capital portfolio as of June 30, at 4.5 per cent and 4 per cent of assets respectively.

“Although it is very early days, we are pleased that the company’s net asset value has moved forward modestly. Much of the positive performance to date has been delivered by holdings we would classify as early-stage. Indeed, our blue-chip holdings have typically detracted from performance thus far, with GlaxoSmithKline and AstraZeneca in particular showing short-term share price weakness,” Mr Woodford said.

The trust’s premium to NAV has continued to rise since the reporting period, and currently stands at over 15 per cent, according to Winterflood Securities.