Neil Woodford’s decision to shut his company has caused the share price of the investment trust he managed to collapse.
Mr Woodford announced on Tuesday evening that, following his firing as manager of the Woodford Equity Income fund, he was shutting Woodford Investment Management and resigning as manager of both the remaining funds he runs.
He described the decision to close the company as "painful".
The shares of the Patient Capital trust, which he had managed since its inception, were 13 per cent lower this morning at 29.9p.
A statement to the stock market from the trust's board said Mr Woodford was contractually obliged to work a three month notice period as manager of the trust, but that the board was in “advanced discussions” with a replacement.
The shares were 37p at the start of Tuesday October 16, when Mr Woodford’s exit from the Equity Income fund was announced.
The closure of the Equity Income fund will directly impact on the Patient Capital trust because the former owns a stake in the latter.
As the Equity Income fund is wound down, the shares it owns in Patient Capital will be sold, creating further downward pressure on the share price.
There are also some holdings in common between the two funds and as the Equity Income fund sells down its stakes there will likely be pressure on the prices of those investments, also adding to the pressure on the Patient Capital share price.
The statement from the trust's board read: “The board of Woodford Patient Capital Trust announces that, in light of recent events, Woodford Investment Management Limited has today served notice of termination in relation to its role as portfolio manager.
"During its three-month notice period, WIM has committed to work collaboratively with the board and its advisers throughout this transition period in order to protect the interests of shareholders.
"The board is in advanced discussions in relation to the ongoing management of the company's portfolio and expects to be in a position to announce details of the new management arrangements shortly."
When he launched the trust, Mr Woodford agreed not to take a fee unless the investments returned 10 per cent in a year, something which has never happened.
If the closure of Woodford Investment Management is to be the final chapter in Mr Woodford’s career, it will prove to be the end of a storied journey.
His intention had originally been to join the Royal Air Force, but colour blindness prevented that.
Instead, he went to the University of Exeter to study Economics and Land Economics. After roles in insurance and corporate finance he joined Henley-based Perpetual Fund Managers in 1988, which later became Invesco Perpetual.
An investor who placed £1,000 of capital with Mr Woodford on his first day at Invesco would have collected £24,000 by the time he departed in 2014 to set up his own company. He was awarded a CBE in 2013 for services to the economy.