Fund manager Neil Woodford’s torrid year has taken a slight turn for the better as one of the largest holdings in his £854m Woodford Patient Capital investment trust has gained 17 per cent.
The company, Benevolent AI, accounts for 7.5 per cent of the capital in the trust, and is the fourth largest holding in the trust. It is also held in Mr Woodford’s £6.6bn Equity Income fund.
Benevolent AI is a London-based company using artificial intelligence to discover new medical drugs.
The unlisted business recently raised $115m (£81m) from new investors, including Mr Woodford. That valued the business at $2bn (£1.4bn). This is about a 17 per cent increase since the company was last valued, during a fund raising in 2015.
Mr Woodford has been a shareholder since that fundraising.
Patient Capital shares have performed well during the recent market tumult, the shares are currently (20 April) 85p, having been 80p in March.
The trust has lost 6 per cent over the past year. compared with a gain of 7 per cent for the average trust in the AIC UK All Companies sector in the same time period. The trust has gained 0.77 per cent in the 2018 calendar year, compared with 0.75 per cent for the sector average.
Mr Woodford has responded to the relative underperformance of the trust by saying that the “underlying activity” of the companies in which he is invested is in line with his expectations, and he expects the share prices to reflect this in time.
Mick Gilligan, a partner and fund researcher at Killick and Co said the Patient Capital trust will always be a volatile investment, but the track record of the manager means any share price decline should be regarded as a buying opportunity.
Judith Mackenzie, who runs the Downing Strategic MicroCap investment trust, which invests in quoted and unquoted companies, but tends to invest in smaller companies than does Mr Woodford, said a key advantage of unquoted companies is that they often operate in niches and so are less reliant on the performance of the wider economy.
David.Thorpe@ft.com
