Neil Woodford has pulled the plug on plans to raise additional cash for his £800 million ($1.1 billion) life science-focused investment vehicle. The big-name fund manager signaled his intent to search for ways to raise more money in January, only to back away from the plan this week in the face of "the continuing uncertainty prevailing in markets."
Having moved quickly to invest the IPO haul, Woodford wanted the additional funding to back what was described at the time as a "substantial ongoing pipeline of investment opportunities." That pipeline of investment opportunities is still in place, but the board has decided topsy-turvy market conditions mean now is the wrong time to raise the cash needed to execute the strategy. The board revealed its decision alongside results of a survey of investors, in which it learnt that 25% of people would be unlikely to back an additional issue of shares.
While 36% of respondents described themselves as likely or very likely to snag any new shares, they will have to wait until conditions improve. By his own admission, Woodford's Patient Capital Trust has taken a "hammering" over the past 6 months as investors have fled biotech stocks in general and Northwest Biotherapeutics ($NWBO), one of his big bets, in particular. "We've had one or two things go not as well," Woodford said in a company video. The net asset value per share of the fund ended the year at £0.97, which represents a 2.6% decline over 6 months.
With Woodford designing the trust for investors who are willing to commit for the long term, such a dip could prove inconsequential, but the market conditions behind the trend have disrupted plans to top up with fresh capital. The outcome means the fund's ability to make new investments is limited for now, although the board has resolved to monitor the market with a view to returning to the financing plan if conditions improve.
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