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Woodford turns to China for next venture

Woodford turns to China for next venture

Neil Woodford and his business partner Craig Newman are in China for negotiations with Chinese investors about a potential new venture. 

FTAdviser understands the meetings are with investors who are focused on early stage companies and have worked with Mr Woodford as co-investors in such companies in the past.

Mr Newman was a sales director at Invesco and became chief executive of Woodford Investment Management at launch. He owns 35 per cent of the equity in Woodford Investment Management, which is in the process of closing down.

The meetings in China follow previous meetings earlier in 2019 with investors from the Middle East. 

But Mr Woodford’s interest in investing in early stage quoted and unquoted companies has been central to the unravelling of his investment empire.   

The company had assets under management of £10.1bn at its height in March 2017 but outflows from the flagship Equity Income fund hit £9m per working day in May 2019, and Mr Woodford found himself unable to meet the demand from investors wishing to take their cash out, partly because the stakes in the early stage companies were difficult to sell. This forced him to suspend dealing in the fund on June 3. 

A recent note from the fund’s administrator Link stated that investors would get a payment from the fund in late January, though this payment is coming from the sale of the listed assets.

US firm PJT Park Hill has been hired to sell the unquoted holdings.

Woodford Investment Management is scheduled to close in mid-January.  The fund manager has already been formally replaced as manager of the Woodford Equity Income fund and the Patient Capital investment trust. 

He has resigned as manager of the Woodford Income Focus fund and a replacement manager is expected to be hired in the coming weeks.

Mr Woodford created the Patient Capital investment trust in 2015 to invest in early stage quoted and unquoted companies.

From launch until this week, when the trust formally came under the management of Schroders, it lost 66 per cent of its assets.

In the Woodford Equity Income fund the unquoted part of the portfolio performed better than the quoted, though Mr Woodford was forced to sell the unquoted assets to meet redemption requests. 

david.thorpe@ft.com

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