Now embattled tycoon faces axe from other fund
Shares fall amid fears Woodford brand is too toxic
TROUBLED fund manager Neil Woodford could be fired from running one of his own high-profile funds amid investor fears that he has lost his golden touch.
The Woodford Patient Capital Trust, which manages more than £570million of savers’ money, has carried the 59-yearold’s name since its launch in 2015.
But its shares have plunged since Mr Woodford’s separate Equity Income fund hit the rocks last week.
Although Mr Woodford is in charge of investing the Patient Capital Trust’s cash, his performance is overseen by an independent board which is now facing questions over whether to sack the embattled manager.
The Woodford Equity Income fund encountered trouble last week as two years of dire performance prompted too many savers to pull their cash out all at once.
The £3.7billion fund was forced to freeze savers out of their nest-eggs to give Mr Woodford time to sell some of the fund’s investments. Mr Woodford’s Patient Capital Trust will not befall the same fate as it is structured differently. The trust is listed on the stock market, meaning investors own shares, which can be sold if they want money back.
But investors are now so worried about Mr Woodford’s judgement that shares in the Patient Capital Trust have tumbled 21 per cent since last Monday, wiping a massive £145million off the trust’s market value.
Sources said the board of Woodford Patient Capital, led by chairman Susan Searle, had not ruled out sacking Mr Woodford and appointing a new fund manager, which would be an embarrassing blow for the oncestar stock-picker. He runs three of his own funds from the firm – the Equity Income fund, the Income Focus fund and the Patient Capital Trust.
In a public statement, Miss Searle urged Patient Capital Trust investors not to panic – but shares fell another 6.1 per cent, or 3.8p, to 59p over the course of the day.
She said: ‘The board is closely monitoring the situation and is engaging with its shareholders and advisers.’ Short sellers, who make their money out of betting that a company’s value will fall, are now circling the trust. A hefty 4.4 per cent of its shares are currently on loan to shortselling hedge funds.
Mr Woodford was sacked last week by prestigious wealth manager St James’s Place, and investment firm Omnis, from running funds for the firms.
The Patient Capital Trust’s board will meet major investors before deciding on Mr Woodford’s future.
Many shareholders fear that Woodford’s name is now tarnished – and that the contagion surrounding his Equity Income investments could spread to the Patient Capital Trust. After 25 stellar years at Invesco, which he left in 2014, Mr Woodford became known in the investment industry as ‘the man who made middle England rich’. Yet several recent punts which Woodford Equity Income took have been bad bets: Drugs company Circassia tumbled in value, as did shares in mail-order mattress firm Eve Sleep.
This has led some investors to worry that the companies Woodford holds through his Patient Capital Trust could run into similar trouble – especially since several are focused on earlystage, untested technologies.
There is also another fear playing on investors’ minds. Woodford’s troubled Equity Income fund owns a chunk of Patient Capital shares, and could cause their value to plummet if it is forced to sell them in a desperate attempt to raise money for its investors.
‘£145m wiped off trust’s value’