Neil Woodford’s Patient Capital investment trust had a torrid year, despite several companies in the portfolio delivering strong returns.
In the year to 30 June 2018, the trust lost 14 per cent, compared with a gain of 12 per cent for the average trust in the AIC UK All Companies sector in the same time period.
In the trust’s annual results statement, Mr Woodford highlighted the performance of Atolus, a business that floated on the US stock exchange at a premium valuation.
But Mr Woodford said: "Clearly not all investments we’ve made have developed as positively as the examples provided above. That is the nature of investing in earlier-stage, higher-risk businesses."
In a sign of the volatile nature of the companies in which the Patient Capital trust is investing, over the past three months it is the best performer in its sector, returning 10 per cent compared with a loss of 1.4 per cent for the AIC UK All Companies sector.
When launching the trust, Mr Woodford said it would be suitable for only those investors with a very long-term time horizon and neither Mr Woodford nor his company receive a fee unless the trust achieves a return of 10 per cent.
The trust has lost investors money since launch, losing 18 per cent in the just over three years since launch.
Laith Khalaf, senior analyst at Hargreaves Lansdown said: "Successes in the fund include Benevolent AI, Oxford Nanopore and Purple Bricks, though these have been outweighed by poor performance from stocks like Prothena, Circassia and Northwest Biotherapeutics.
"Investing in early stage companies clearly comes with risks attached and, as the title of the trust suggests, a good deal of patience is required. It’s worthy of note that the trust works on a ‘no win, no fee’ basis, so the investment manager shares in the financial fortunes of investors."
david.thorpe@ft.com
