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Woodford Investment Management to launch GBP200m Woodford Patient Capital Trust

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Woodford Investment Management is launching Woodford Patient Capital Trust which will invest in a diversified portfolio of UK companies, both quoted and unquoted.

Woodford Patient Capital Trust will target an issue of GBP200 million by means of a placing and offer for subscription of ordinary shares, and will seek admission of its ordinary shares to the premium segment of the official list of the UK Listing Authority and to trading on the main market of the London Stock Exchange.

Woodford believes that the lack of long-term patient equity capital has created a compelling opportunity to invest in businesses with outstanding intellectual property. The company will invest in: mid and large-capitalisation listed, mature companies; early-growth companies, typically quoted; and
early-stage companies, quoted and unquoted.

The portfolio will represent a mix of Woodford’s highest conviction blue-chip ideas together with exposure to early-stage and early-growth companies.

The company will adopt an unconstrained investment approach aiming to identify the best, untapped growth opportunities to deliver attractive long-term returns.

The Portfolio Manager will not receive a management fee from the Company for its services and will only be awarded a fee based on performance. Any performance fee will be payable in ordinary shares further aligning the Portfolio Manager’s interests with shareholders.

The Company will aim to deliver a return in excess of 10 per cent per annum over the longer term.

The Company’s portfolio is expected to consist of 50-100 holdings with exposure to early-stage and early-growth companies growing over time.

The Portfolio Manager specialises in managing UK and global equities on behalf of retail and institutional investors. The Portfolio Manager had £9.3 billion of assets under management as at 31 January 2015, including £4.7 billion of assets in the CF Woodford Equity Income Fund.

Neil Woodford, one of the most respected fund managers in the UK, will have principal responsibility for the management of the Company's portfolio. Neil will be supported by a team of investment professionals including Stephen Lamacraft, Saku Saha and Paul Lamacraft.

Initially, the Company is expected to have a portfolio that is dominated by mid and large-capitalisation listed, mature companies that offer growth opportunities. Over time, and as appropriately attractive investment opportunities present themselves, the exposure to early-stage companies and early-growth companies is expected to gradually build. This process may take one to two years from Admission.
  
The Portfolio Manager is passionate about investing in early-stage and early-growth companies which it believes are unloved sectors, offering significant untapped opportunities that are much less influenced by wider market sentiment. 
 
The Portfolio Manager believes that the UK has some of the best universities in the world, developing some of the best intellectual property. Unfortunately, as an economy, the UK does not have a good track record of converting these great ideas into long-term commercial success. There are many reasons for this but the principal one, in the Portfolio Manager's view, is a lack of appropriate capital.  Very few investors are willing to embrace the long-term ‘patient capital’ approach required in this area to deliver successful outcomes.
 
All early-stage companies and early-growth companies, from whichever sector, need nurturing – they need patient, long-term capital in order to fulfil their long-term potential. The capital available to nascent businesses in the UK has been scarce and the capital that has been available has tended to be too short-term in nature.
 
It is the Portfolio Manager's view that the lack of patient equity capital has created a compelling investment opportunity. The demand for capital from early-stage companies and early-growth companies is high, but the supply is low. The returns on capital deployed, therefore, are potentially attractive.
 
The reward for success also has potential wider economic benefits. Doing more to help early-stage entrepreneurs and innovators can help to develop the UK’s ‘knowledge economy’ as part of a much-needed long-term rebalancing of the UK economy.
 
Woodford and his team have been investing in early-stage companies and early-growth companies for more than a decade.
 
Woodford says: “Patient capital is the missing component for many companies and the reason why great innovation hasn’t translated into commercial success for the UK economy.
 
“Patient capital investors work closely with early-stage businesses and help nurture them to achieve commercial success. It takes involvement, flexibility and above all, it takes time.”    
 

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