Peter Elston, chief investment officer at Seneca, has revealed why he has invested in Neil Woodford's investment trust.
All nine of the funds run by the Liverpool-based multi-asset fund house made an investment in Woodford Patient Capital after meeting Mr Woodford at his Oxford office.
Mr Elston said: "Three of us went there, and we were impressed. He has a fantastic contacts book when it comes to early stage investments.
"We think of ourselves as value investors, and one of the things we were concerned about is, 'Patient Capital is a growth fund?'. But with early stage investments, you are not necessarily over paying.
"Neil talked us through some very interesting investments. He said he often partners with investors who have a lot of experience in the field. One of the things he said to us is he doubts himself everyday."
Mr Elston said the capital for the investment came as a result of the firm selling a small portion of its holding in fund platform AJ Bell when it listed on the stock exchange.
He said: "We think of that money as being for unquoted equity. But we didn’t want to put it into a private equity fund, as they have layers of fees.
"Patient Capital didn’t do very well at the start because there were a lot of investors who didn’t understand that it takes times for those sort of early stage companies to become profitable.
"The only way for a fund manager to be successful over the long-term is to do something differently, if you do the same as everyone else, you will end up doing the same as everyone else, which is badly.
"We like that Neil Woodford wants to do things differently to everyone else. The performance of the fund has started to improve."
The Patient Capital investment trust has returned 3.23 per cent over the year to January 31, compared with a loss of 2.66 per cent for the average trust in the AIC UK All Companies sector over the same time period.
But on a three year view, the trust has lost 2 per cent, while the sector returned 26 per cent.
Philip Milton, who runs PJ Milton and Co in Devon, said: 2The growing discount to the underlying asset value [19 per cent at time of writing] may well tempt me in due course. Perhaps the value is beginning to appear now after all."
david.thorpe@ft.com
