Woodford Patient Capital Share Discussion Threads

[eastbourne1982] 30/1/2016 18:08

If you look at a lot of Woodford's open market investments, i.e. shares that normal investors like me and you can buy I doubt his record is very impressive at all, Woodford survives by investing pre ipo, strip out the gains he makes there and I would imagine his record is very mediocre.

The timing of his purchases often seem poor as well, i.e. he seems like the type of investor that will buy a range bound share quite near the top rather than anywhere near the bottom.

I can't see why so many people are so keen on this fund, if you are regularly on a share bulletin board you probably have the time to pick your own shares and not rely on someone like Woodford.

[topvest] 30/1/2016 16:19

Well what a disaster this has been so far. Trouble is the portfolio is loaded with storyboard stocks. The share price is likely to drop much further. Oh dear...reputation is going to take a bit of a pounding. Think Mark Bennett at Invesco is better. He doesn't get distracted by storyboard stocks. Basic error!

[ceaserxzy] 30/1/2016 15:18

I think it is compound on the issue price of 100 p. So to make the target in the second year (forget about the first years as it is way down) the price needs to be over 120 p, a much tougher although not an impossible target.

[chinahere] 30/1/2016 13:00

Is it 10% in a calendar year?

If so a reduced NAV now isn't much of a problem and will make 10% growth easier in the future won't it.

[ceaserxzy] 30/1/2016 09:04

It looks like a old style dollar averaging, even for someone with Woodford's reputation, so that his commission earning threshold will get easier to reach. NAV already almost 15% down, it will be very hard to achieve a more than 10% increase for each year.

[jonwig] 30/1/2016 07:36

In the blog update for December 2015, the reason is given for a possible further capital raising:

In terms of outlook, with the portfolio now fully invested, we are very confident that it can deliver the attractive long-term returns we envisaged when the trust was launched. During the process of building the portfolio, we have found that the opportunity set is even deeper and richer than we had anticipated. We continue to identify exciting new potential investments across a wide range of industries, as well as opportunities to participate in further funding rounds for existing holdings. To take advantage of these opportunities, we have recently announced that we are looking at ways we can raise additional capital in the year ahead.

? New ordinary shares ... not feasible so long as existing discount;

? "C" shares ... would be issued at a small premium unless he absorbs costs, which would then be passed on to ordinary shareholders, doubtful I think;

? new ords with attached warrants ... maybe: this used to be very popular in the old days;

? debt, CULS ... no way: needs plenty of income production to service.

[liquidkid] 29/1/2016 17:27

Stick it you PI Morons if you don't like the way I treat your bling then you don't get to play with me.

Neil Woodford will be running a new fund, known as Omnis Income & Growth, which will invest in both listed and unlisted companies. However this won’t be available directly to private investors. It can only be accessed by the 3,000 advisers that use the Openwork platform, and its investment proposition Omnis, which enables them to build multi-asset portfolios using funds from the likes of Schroders and Jupiter.

But Ouch NAV at all time low 86.52p. Time to pull out the big guns and fire off some quotes for the Brit Buffet:

On the track record.
'It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently.'

On needing the sheep to pony up moar money
"Nothing sedates rationality like large doses of effortless money."

On Patient investing
"Our favorite holding period is forever." with the caveat:
"Should you find yourself in a chronically leaking boat, energy devoted to changing vessels is likely to be a more productive than energy devoted to patching leaks."

[dr biotech] 28/1/2016 11:13

HAL 0.07% of the WEIF and 0.18% here.

I expect some of the companies here to go to the wall. Of the 150 or so holdings across both funds there are bound to be a few losers. His track record over 30 or so years is excellent. Has he just been lucky for that long?

[hutch_pod] 22/1/2016 20:25

Thanks jonwig, helpful detail. I was trying to find something earlier like that on the woodford or Duff &Phelps sites.

[jonwig] 22/1/2016 18:49

We must presume that WPCT is following BVCA valuation guidelines (or, maybe, stricter ones of its own). These are well-understood in the VCT, EIS, PE industry - why would the FCA be the least bit concerned? The BoD of WPCT will have scrutiny of this as a major function.

Quoted companies are valued at the mid price ruling at the time of valuation.
But ... a discount of up to 25% should be applied in cases such as a stake which would be difficult to dispose of. (In a case such as PURP a discount of 25% might be appropriate.)

Unquoted entities are valued as either Early Stage or Development Stage.

Early: at cost, less any provision considered
necessary, until they cease to be viewed as
early stage. The only exception to this
principle is where a significant transaction
involving an independent third party at arms-
length values the investment at a materially
different value.

Development: one of the bases set out below:
• Cost (less any provision required)
• Third party valuation
• Earnings multiple
• Net assets

That's the bare bones - a lot more guidance here:

[prewar] 22/1/2016 17:22

Thanks LK, very helpful

Regarding PURP can you tell me what value as been ascribed to the holding for what is now a quoted entity?

Similarly Stratified Medical, Immunocore and Proton Partners, what value have they been included at in the daily NAV figures?

You should voice these concerns to the FSA, I'm sure they'd be interested.

One final question what's your position on WPCT, thought you were more interested in WEIF?

[hutch_pod] 22/1/2016 17:15

Presumably the risked discount rate applied by Duff & Phelps attempts to capture the inherent risk - they certainly seem to be an independent expert, although i see Capita has the final decision on valuations.

[liquidkid] 22/1/2016 17:02

Patience Nibbler, don't worry yourself too much about it this it will all come out after the Litigation hits and the investigators look into all the unquoted's.
Omissions by an issuer of securities in relation to its published statements
either demonstrably misleading published statement or not publicly available.

Anyway its clearly apparent in PURP you even mentioned it! or do you not bother yourself with the details - IPO documents are soooo tedious to get through.
Here's a few suggestions to start with if you feel the need to do some digging.

Stratified Medical
Immunocore
Proton Partners

[prewar] 22/1/2016 14:59

LK - Can you give us some specific examples of where interests have been overvalued as per your assertion.

TIA

[liquidkid] 22/1/2016 14:28

When in accruality he buys an interest in a company for £1m no one understands why that should immediately be valued by his valuation gnomes at £7m or many other multiples thereof!

This can be mathematically explained as a function of his reputation/ego/id because he is the New Star Asset Manager of the Long Term Capital Management variety.
f(WPCT)1+1=7

[mad foetus] 22/1/2016 14:00

the question of discount/premium is more complex in the case of wpct because of woodford's long term record and the unquoted nature of most of his investments. I'm not sure how the unquoted portion is valued, but you could certainly run the argument that he acquires interests in underlying companies at an inherent discount due to the lack of capital available to those companies.

In the end, we will only find out when unquoted companies float, but if he buys an interest in a company for £1m I don't understand why that should immediately be valued by the market at £700k.

[liquidkid] 22/1/2016 13:48

Its a CEIC not an OEIC this is why the premium discount is so important. It cannot be affected by REDEMPTIONS. Instead it is a shares supply / demand sort of thing in which they can play all kinds of shenanigans with the share price - like the 5% swing just highlighted. But in the long run it is going to have to settle at a discount to properly account for all this inherent risk. And with the markets they way they are it should respectfully now be about 30% discount to NAV.

[jonwig] 22/1/2016 12:19

Votiem - you wrote: "given traditional discounts to NAV with OEICs ..."

OEICs are priced at NAV. And are there any OEICs comparable with WPCT?

[votiem] 22/1/2016 12:05

Hi eeza. I looked in the mirror and saw a guy who got out at 115.5

[liquidkid] 22/1/2016 11:43

1.3p off the NAV on 20 Jan down to 88.14 - The Aligned Mimed Effect
at 87.7 yesterday a -0.5% discount
1.36p off the NAV on 21 Jan down to 86.78p - An Alkmedes Heel syndrome
at 90.25 a 4% premium.

With all this volatility one would have to be a having a cerebral infarction to be even considering holding these now.

[eeza] 21/1/2016 23:01

Look in the mirror.

You'll see an idiot.

[votiem] 21/1/2016 22:59

Well... NAV to share price has at last reached equilibrium.

As of now given traditional discounts to NAV with OEICs I can see 79p in the next week.

And given the mega uncertainties globally expressed so eloquently by fellow posters with few signs of pressures abating here I can see 73-75 p in the next four weeks.

[cougar99] 21/1/2016 17:41

Presume one reason that this fund became fully invested so quickly was the performance fee arrangement where they need to make >10% pa - so if they had only invested half the dosh then they would have had to try to make 20% on that for an overall return of 10%. He does seem to have bitten off more than he can chew with this fund - turkey sandwich anyone (as I doubt humble pie will be available)....

[harveydee] 21/1/2016 14:34

Oh dear, Alkermes opens down 35% .. Does this fund have too many turkeys ?!