Neil Woodford has been forced to undersell shares to the tune of £10m.
FTAdviser understands that Woodford Investment Management completed the sale of the entire 142m shares it owned in FTSE 250 technology company IP Group for about £76m.
On the day the sale was completed, the shares of the same company closed at 61.4p, which would notionally have valued his holding at £86m.
The share sale represented the entire holding of Woodford Investment Management. The sale happened in a series of of tranches after the market closed on Tuesday.
IP Group shares have been a torrid investment over the past year, with the shares having dropped in value from £1.28 to the current level of 59p.
Selling the shares at a discount to their prevailing value as a result of having to sell a large tranche of shares in one go is known as being a forced seller.
Woodford's Equity Income fund was suspended on June 3 amid a wave of redemptions and following a period of stark underperformance and it has lost 13 per cent since.
In his blog outlining the reasons for the suspension Mr Woodford said suspending the fund meant he would be able to take his time for selling holdings and raising cash.
Mr Woodford said at the time he would shift the fund’s capital into larger liquid stocks, though he said he retains the same view of the market and the economy that he has had for a while.
The most recent update from Link, the authorised corporate director of the Woodford Equity Income fund, confirmed the intention remains for the fund to open in December, and that over 80 per cent of the capital is now deployed in large cap equities.
A representative of Woodford Investment Management declined to comment on the sale of IP Group shares.
david.thorpe@ft.com
