Losses deepen at Patient Capital

DESPAIRING investors in Patient Capital Trust are in danger of incurring even bigger losses if they hang on to their shares, analysts warned yesterday.

On the first day of trading since Neil Woodford resigned as fund manager, shares fell as much as 12pc to a record low of just below 30p.

By the close, shares fell 5.5pc at 32.5p, having been worth around 119p in August 2015. It means someone who ploughed £10,000 into the trust at the August 2015 peak, would receive around £2,700 back.

But JP Morgan analysts have warned that those desperate to avoid crystallising their losses may get even less back in future.

The trust’s board is looking at whether it should appoint a new manager, sell it to another fund management company or wind it down and sell the assets.

JP Morgan said that all scenarios will bring risk.

Shares have been trading at a huge 50pc discount to the estimated value of the assets as investors have shunned it.

Yesterday, JP Morgan said: ‘This already includes some hefty writedowns, but it is inevitable that there will be more. We just don’t know how much and when.’

It added: ‘An orderly wind-up is the best way forward.’

But it said this may also be difficult to stomach for investors, who may have to wait for ‘several years’ for assets to be sold at a decent price and their money returned.

The investment bank predicted any new manager is also likely to impose an annual management charge, as well as a performance fee if it delivers decent returns.

The trust currently only charges a performance fee, which investors have not been paying because it has fared so poorly.