Woodford Patient Capital Share Discussion Threads

[scrapheap] 24/10/2019 08:35

Big confidence boost this. Also a hurdle price of 77p is some bar to get away with when at 30p... Well done the board it would appear.

[1oughton] 24/10/2019 08:34

That's not hard

[ny boy] 24/10/2019 08:32

Woodford is not in Shield Therapeutics (STX) since I started buying in the 30p’s, so I must be onto a long term winner imo NYBoy out plays Woody!

[spectoacc] 24/10/2019 07:45

@Jonwig - I'm sure it'll dcb, I just find the RNS utterly bizarre. Schroders can't "reposition" a portfolio that has next to nothing to sell, unless they eg keep the OD, sell Autolus, and use that small amount of money elsewhere?

How are Schroders going to look in 3 months time when the junk gets dumped out of WEIF - or will Link manage to ignore those valuations?

Edit - just found a more recent Top 10 than HL's, from Aug 19 - Woody appears to have taken this off his website:

1. Rutherford
2. Benevolent
3. Atom Bank
4. Oxford Nano
5. IH
6. Immunocore
7. Kymab
8. Mission Therapeutics
9. Ratesetter
10. Autolus

This reflects the sale of OSI, the drop in Benevolent AI valuation (I assume), and the halving of the Autolus stake after selling in the market. Bear in mind those changes still left WPCT with a serious OD (£117m, don't know if still correct), and a load of stocks held in common with the liquidating WEIF - most of them, in fact.

Ratesetter were going to float once. Maybe Oxford Nano's will reappear. But just a look at the top handful show the mess WPCT is in - they can't realise any of them, and the prices WEIF will get can only be guessed at, but are - ahem - highly unlikely to be NAV-accretive. Talk in the press of WEIF holders losing up to another 50%, which seems harsh when lots of quoteds in there, but we all know for eg what IH's actual valuation should be.

Perhaps Softbank will buy IH?

I wish Schroders luck with their reputation. Can they keep the show on the road long enough to get past the WEIF overhangs? Or partake in some of the sales to realise cash - any cash?

[jonwig] 24/10/2019 07:42

Spec - I'm musing. Schroders will know what we know (eg. true nav) and then a lot more. They might even be lifting the lid on IH.

Basically, I'm wondering if I should look to buy at 8 o'clock. but no, I'll go out for a walk!

[spectoacc] 24/10/2019 07:27

@Jonwig - NAV 63p to 77p seems perfectly reasonable - for anything other than WPCT! What's real NAV? 20p? 20p to 77p seems more of a stretch.

I'm surprised at Schroders - a decent name, as you say - you'd think they'd say "hang on, many of these holdings, eg IH, are worthless, and that lack of value is about to be exposed with WEIF dump their holdings".

Now - what if adding Schroders' name is enough to get a large fundraising away, enough to keep many of the unlisteds going a while longer, perhaps to buy back WEIF's 9%, and genuinely have something to "invest"?

I agree on the OD, I think NT will extend another year.

I still say the announcement is nonsensical tho. Schroders aren't taking on an IT with cash to invest, or assets to juggle around. There is no market for most of WPCT's junk. Who's going to buy it when they could have it from WEIF?

Edit - @Jonwig, just to be absolutely clear, where do you see Schroders being able to exit WPCT positions? Autolus is about the only semi-liquid thing, and doesn't even cover the OD.

Edit II - a reminder of WPCT's Top 10 as per HL:

Benevolent AI (presumably already written down in half, tho with WEIF still to dump)
Oxford Nano (allegedly a good co but have apparently pulled their float - WEIF still to dump)
Autolus - quoted on Nasdaq, should be realisable
Crossco(1337) Plc - no idea, never heard of it, is 8% of the fund?
Rutherford - arguably valueless, "listed" but completely untradeable, WEIF to dump
IH - nearly 7% of WPCT. Need say nothing on this one, other than "WEIF to dump"
Immunocore - any value?
Oxford Sciences - this is long since sold, list must be seriously out of date
IH, again
Mission Therapeutics

Most of the liquid stuff - half of Autolus, the OSI - has been dumped already. So take the above list with a pinch of salt.

[jonwig] 24/10/2019 07:25

Spec - existing policy is as set out in the prospectus, not necessarily keep the same portfolio constituents. They'll be tons better than Woody at picking ideas.

[jonwig] 24/10/2019 07:22

I can see NT extending the overdraft after this, and they have the repute to be able to squeeze more from some unquoteds. They could also do some imaginative financing such as offer warrants to subscribe to new ords. (Then they could support some cash calls.)

A lot of investors will see this as a reason to buy in. If the discount were to reach 20% and Schroders achieve 77p nav, that would be a doubling of the share price from here.

[spectoacc] 24/10/2019 07:21

That's brilliant, but - am I missing something? They talk about "...Manage the portfolio in line with ...existing investment objective and policy", yet there is no "investment" to be done with WPCT. It has no cash. It has negative cash. Its holdings are mostly unrealisable, and generally need a lot more money.

It's largely nonsensical - they're talking as if Schroders can bring a new approach to running WPCT. Unless they can somehow churn the portfolio, how can that be the case?

[jonwig] 24/10/2019 07:13

Will the share price bounce this morning?

Portfolio Manager Appointment

The Board of Woodford Patient Capital Trust plc is pleased to announce that it has agreed heads of terms to appoint Schroder Investment Management Limited as the Company's portfolio manager. Shortly following the appointment, which is expected by the end of 2019, the Company will be renamed Schroder UK Public Private Trust plc.

Schroders intends to manage the portfolio in line with the Company's existing investment objective and policy. It will bring together its successful and established investment approach across both quoted and unquoted companies to manage the Company for the long-term, in support of positive outcomes for shareholders and British enterprise.

Schroders has extensive experience across both public and private markets and has the relevant sector expertise, including across healthcare and technology, and will operate a team-based approach to manage the Company's portfolio. Schroders' beliefs are aligned with the Company's philosophy of identifying and providing access to investment opportunities irrespective of public or private ownership structure.

Susan Searle, Chairman, commented:

"Following a competitive process, we are delighted to be appointing Schroders as the Company's portfolio manager. Its careful and considered long-term approach to investment, backed by its substantial research resources in both public and private assets, makes it the natural choice to manage the Company's portfolio.

"I would like to thank our shareholders for their support throughout this process as we have worked to put in place the right portfolio manager against the background of challenging circumstances. Throughout the process, the Board has had a clear focus on achieving an outcome that protects and enhances long-term shareholder value and we believe Schroders is best placed to deliver this. A well-managed handover is underway to protect shareholder value and deliver long-term performance for all shareholders."

The Board has agreed a fee structure which aligns the interests of shareholders with those of the incoming portfolio manager. On appointment, Schroders will not take a management fee for three months; thereafter Schroders will be paid a management fee at the rate of 1.0% per annum on market capitalisation up to GBP600 million and 0.8% per annum thereafter.

There is no performance fee payable until 31 December 2022, at which point Schroders will be eligible to a fee of 15% of any excess returns above a NAV per share of 77p (the latest reported NAV per share is 63.23p as at 22 October 2019). Thereafter, a performance fee of 15% of any performance above a hurdle of 10% of net assets each year will be payable, subject to a high watermark.

Further details will be announced following Schroders' formal appointment.

[spectoacc] 24/10/2019 06:51

Deranged - I think that's a good definition.

Still fascinated by Woody's need to slot 60% of his WPCT holding to "pay his tax bill" in July, after taking tens of millions out of WIM in 2018 alone. Granted, his money may genuinely be stuck in WEIF along with everyone else's, but can we rule out a Woodford bankruptcy? Did he borrow against his house to invest in his own fund?

[jonwig] 24/10/2019 06:50

How Jupiter got worried about WEIF and its unquoteds in 2015 and exited completely in 2017:



Kept quiet as they feared a run on the fund.

[dr biotech] 24/10/2019 05:34

Bit on possible legal action. (Free to read)

[essentialinvestor] 24/10/2019 00:24

Nightmare on Woodford Street?.

[tim 3] 23/10/2019 23:49

Yes theres enough out there on Woodford to make a 3 hour movie let alone fill a half hour slot!

[topvest] 23/10/2019 20:44

I think he has a point, albeit I'm not sure he was behaving very well. I agree that the programme should have focused fully on Woodford.

[daffyjones] 23/10/2019 19:23

Pretty funny
Mark Denning, the disgraced fund manager exposed in the Panorama programme for allegedly front-running share purchases, and forced to resign from his firm, is 'furious' that he is being compared to a crook like Woodford

hxxps://citywireselector.com/news/mark-denning-furious-at-bbcs-woodford-comparison/a1284162

"Denning was furious the he was included in the programme alongside Woodford. 'I am appalled that the BBC decided to include me in this broadcast, drawing grossly inappropriate comparisons with the collapse of Woodford funds, and the potential loss of substantial amounts of investors’ monies.' "

[topvest] 23/10/2019 18:32

The real value of Rutherford and BENEVOLENT AI is probably zero as they will spend all their cash without generating much revenue and are highly unlikely to ever make a profit. Same principle applies to most of the pre-revenue rubbish in WPCT. It’s all tech bubble nonsense!

[chucko1] 23/10/2019 18:12

The only thing they would be a creditor for is the trade, not the cash. After all, in compensation for receiving the cash, WIM (whichever fund) would own an additional interest in RUTH. An insolvency court might determine that this trade was of nil value and so allow it to be voided.

Of course, were it to be demonstrable that the cash was required to keep RUTH in business, where no alternatives were available on similar terms, it calls into question the entire basis for its valuation; is it really a going concern? In that case, it would be of immense negative value to WIM relative to the current valuation, in which case any other creditor would be stuffed anyway.

Might as well be hung for a sheep as for a lamb. NW designed it all so that if it ever went bang, it was going to be a big one.

Likely 30p is still a good price to take for WPCT.

[jonwig] 23/10/2019 17:45

Dr B - "How can they be a creditor?" Honestly I don't know. Polonius has always been my guide.

[tim 3] 23/10/2019 17:33

Watched the Panarama programme was average so much more they could have included just by reading this thread!

The FCA really is so weak they knew he was breaking rules but did nothing to warn investors about it.

Its not like its some tiny obscure fund nobody heard of he was one of the biggest fund managers in the UK with funds that were marketed as safe and conservative can't believe their lack of action.

Totally unfit for purpose in this area as has been shown again and again.

[dr biotech] 23/10/2019 17:12

How can they be a creditor? Promising to fund them doesn’t mean they owe them. I’m pretty sure even in his folly there would have been some get out clauses for the funding. Only way that would be possible is if WPCT had bought a stake for a set amount with some payments deferred, but that would be very unusual arrangement. Wouldn’t surprise me though...

[jonwig] 23/10/2019 14:47

@ EinSensei - true, with W on board they wouldn't need the loan.

"Impact-linked pricing" is something they might be able to manipulate, as they aren't pure proton beam in their offering.

But I wonder whether 'business downturn' is relevant. I always thought they were after rich Arabs and Russians, since the NHS is building its own facilities.

@ Daffy - yup, that makes sense. They would presumably become a creditor of WIM and join the queue.