High-profile investment guru Neil Woodford has rolled out his $300 million investment vehicle in the U.K., looking to attract a host of small investors behind a publicly traded trust that has big plans for investing in a new wave of small biotechs.
|Neil Woodford--Courtesy of Invesco|
In the works for months, the Woodford Patient Capital Trust has been a darling of the U.K. financial press--though the U.S. financial press hasn't shown the same enthusiasm. Since Woodford departed from Invesco to start his own name-brand fund, he's been incredibly effective at garnering some gushing reviews in the local press. An active investor in biopharma, Woodford played a key role in defending AstraZeneca ($AZN) management during the Pfizer ($PFE) takeover attempt. And he's invested in a slate of biotechs, including the controversial Northwest Biotherapeutics ($NWBO).
This new trust will attempt to do something new: Bring investors back into biotech, a field that has been largely shunned in the U.K. in the wake of some high-profile failures. Woodford is betting that investors will back him, even if they're skittish about the high-risk world of drug development.
One aspect that has attracted a lot of attention is Woodford's plan to forego the usual fee associated with managing a trust like this, with the aim of delivering a 10% return. But a review of the trust rolled out today shows that's not quite accurate. Woodford will take a fee of 15% for returns over the 10% mark, potentially allowing some hefty returns if the fund performs well.
A success here would mark a big boost to the U.K.'s biotech scene, where world-class science has been hampered by a lingering cash crunch in the field.
"British scientists are brilliant and world-leading inventors," Woodford recently told The Telegraph, "but they are absolutely crap at translating their discoveries into commercial success."
The trust's failure, though, would likely set the industry and those scientists back for years. -- John Carroll (email | Twitter)