InvestmentsAug 4 2016

Woodford Patient Capital suffers 10.8% NAV decline

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Woodford Patient Capital suffers 10.8% NAV decline

The Woodford Patient Capital Trust has seen its net asset value fall 10.8 per cent in the six months to June 30 2016 in a “challenging half year period”.

Net assets fell from £805m at December 31 2015 to £718m six months later, while the net asset value per share declined from 97.37p to 86.81p. The trust also moved to a 3.1 per cent discount in the period compared with a 3.7 per cent premium at the end of 2015.

In the unaudited half year report manager Neil Woodford noted it had been a tough start to the year for financial markets, with healthcare attracting negative sentiment throughout the period, particularly in the US where the Nasdaq Biotechnology index has declined more than 40 per cent since its July 2015 peak.

He added: “Despite considerable progress across much of the portfolio, the company’s net asset value declined by 10.8 per cent in an investment environment that was very challenging for the share prices of early-stage businesses.

“Importantly, in most instances, this share price behaviour is not in any way linked to a deterioration in individual company fundamentals. It has, however, had a detrimental impact on the share prices of some of the businesses in which we have invested and, in turn, the net asset value of the trust overall.”

The manager acknowledged that “some investors will be disappointed with the performance so far, but it is early days for a strategy that is looking to exploit very long-term opportunities”.

“As we have said before, not everything we invest in, small or large, will succeed. Some of the businesses we have invested in will encounter problems and sometimes things will go wrong. That will inevitably mean that some businesses are unable to fulfil the potential that we saw when we first invested in them,” he continued.

Meanwhile chairman of the trust, Susan Searle, also highlighted the turbulent market for small to medium sized quoted companies was in part due to the uncertainty following the EU referendum decision in June. But she added: “The board and the portfolio manager remain confident that this decision will have no impact on the company’s long-term prospect.”