Neil Woodford said his decision to sell unquoted companies in his Equity Income fund to the Patient Capital trust he also manages was not taken to access liquidity because of redemptions.
The deal saw the Woodford Equity Income fund take a stake in the Patient Capital trust in exchange for cash and unquoted holdings worth more than £72m to the Patient Capital trust.
Investors in the Equity Income fund paid the net asset value price for the stake in Patient Capital, despite the shares trading at a discount to that NAV.
In his latest update to shareholders, Mr Woodford refuted the idea he was a forced seller of the unquoted holdings because he needed cash to meet redemptions as investors pulled billions from the fund in recent years, and said the transaction was the result of 18 months work.
He said: "There has been some renewed commentary recently about the shape of the portfolios.
"Inevitably, I have faced some difficult decisions about what to sell during a period of redemptions, but I have accessed liquidity across the market cap spectrum to ensure the portfolios are exposed to what I believe to be the most attractive opportunities.
"They are in the shape I want them to be."
Despite the troubles affecting his flagship Equity Income fund - which has lost 6 per cent over the past three years while its sector, the UK All Companies, gained 25 per cent - Mr Woodford claimed there were "very few occasions" in the past 30 years when he had been as confident about the outlook for his portfolios as he was now.
The Woodford Equity Income fund has lost 4 per cent over the past year while the UK All Companies sector returned 1 per cent.
Mr Woodford justified the decision to pay the full price for the Patient Capital shares by saying it would have cost investors more for him to build up a stake of that size in the Patient Capital trust.
david.thorpe@ft.com
