2019-08-01_Shares_Magazine

BIG NEWS

6 | SHARES | 01 August 2019

I

nvestors in LF Woodford Equity Income Fund

(BLRZQ62) ǁŝůůŚĂǀĞƚŽǁĂŝƚƵŶƟůĂƚůĞĂƐƚ

December before they can access their money.

Buying and selling in the fund has been

suspended since 3 June and will stay that way

ƵŶƟůůĂƚĞƌƚŚŝƐLJĞĂƌǁŚŝůĞĨƵŶĚŵĂŶĂŐĞƌEĞŝů

tŽŽĚĨŽƌĚƌĞƐƚƌƵĐƚƵƌĞƐƚŚĞƉŽƌƞŽůŝŽƚŽĨŽĐƵƐ

mainly on large and mid-cap stocks in the

FTSE 100 and FTSE 250 indices.

Analysis of company disclosures to

the stock market shows that in July he

ŚĂƐďĞĞŶƐĞůůŝŶŐĚŽǁŶƉŽƐŝƟŽŶƐŝŶ

doorstep lender Provident Financial

(PFG) and subprime lender Non-

Standard Finance (NSF) , as well as

ĂĐƟǀŝƐƚĨƵŶĚ Crystal Amber (CRS:AIM) ,

Southend Airport owner Stobart Group

(STOB) and transport play Eddie Stobart

>ŽŐŝƐƟĐƐ;^>͗/DͿ.

hŶĚĞƌͲĮƌĞtŽŽĚĨŽƌĚŚĂƐĂůƐŽďĞĞŶƐĞůůŝŶŐĚŽǁŶ

ƉŽƐŝƟŽŶƐŽǀĞƌƚŚĞƉĂƐƚŵŽŶƚŚŝŶ NewRiver REIT

(NRR) , IP Group (IPO) , Allied Minds (ALM) and

ŵĞŵŽƌLJĨŽĂŵŵĂƩƌĞƐƐƐĞůůĞƌ Eve Sleep (EVE:AIM).

Woodford says 80% of the proceeds from share

sales since the suspension in June have been

reinvested in FTSE 100 companies.

His asset management business is under

increasing pressure from investors to reduce fees

during the suspension period.

Meanwhile, the fund manager has sold

approximately £1m of his personal holding in

tŽŽĚĨŽƌĚWĂƟĞŶƚĂƉŝƚĂůdƌƵƐƚ;tWdͿ , another

fund he runs. Woodford said he was a ‘reluctant

ƐĞůůĞƌ͛ĂŌĞƌĚŝƐƉŽƐŝŶŐŽĨϭ͘ϳρŵƐŚĂƌĞƐŽƌĂƌŽƵŶĚ

ςϬйŽĨŚŝƐŚŽůĚŝŶŐƚŽŵĞĞƚ͚ƉĞƌƐŽŶĂůĮŶĂŶĐŝĂů

ŽďůŝŐĂƟŽŶƐ͕ŝŶĐůƵĚŝŶŐĂƚĂdžůŝĂďŝůŝƚLJ͛͘

dŚĞďŽĂƌĚŽĨtŽŽĚĨŽƌĚWĂƟĞŶƚĂƉŝƚĂůdƌƵƐƚ

on 29 July revealed that it had been talking with

No joy for investors

stuck in suspended

Woodford fund

But manager Neil Woodford could be sacked from running the Patient Capital Trust

various third party management

ŐƌŽƵƉƐ͕ŝŶĚŝĐĂƟŶŐƚŚĂƚEĞŝůtŽŽĚĨŽƌĚ

could be sacked as manager. Shares

in the investment trust have halved

ŝŶǀĂůƵĞƐŝŶĐĞŝƚŇŽĂƚĞĚŽŶƚŚĞƐƚŽĐŬ

market in 2015.

‘We think any new manager taking on

the contract should make some assessment

via the board and shareholders as to whether

ƚŚŝƐǁŽƵůĚďĞŽŶĂŶŽƌŵĂůůŽŶŐͲƚĞƌŵĐŽŶƟŶƵŝŶŐ

basis, or whether shareholders will look for the

ŝŶǀĞƐƚŵĞŶƚƚƌƵƐƚƚŽŐŽŝŶƚŽ͞ƌƵŶͲŽī͟ǁŝƚŚĚŝƐƉŽƐĂůƐ

of investments and returns of capital to investors,’

ƐĂLJĂŶĂůLJƐƚƐĂƚŝŶǀĞƐƚŵĞŶƚďĂŶŬ^ƟĨĞů͘

tŽŽĚĨŽƌĚWĂƟĞŶƚĂƉŝƚĂůdƌƵƐƚŚĂƐĂƚŚƌĞĞ

ŵŽŶƚŚŶŽƟĐĞƉĞƌŝŽĚƚŽĐŚĂŶŐĞŵĂŶĂŐĞƌ͕ƐŚŽƌƚĞƌ

ƚŚĂŶƚŚĞŶŽƌŵĂůƐŝdžƚŽϭϮŵŽŶƚŚƉĞƌŝŽĚ͘^ƟĨĞů

believes any change in manager would result in

ĂĚŝīĞƌĞŶƚĨĞĞƐƚƌƵĐƚƵƌĞ͕ƐĐƌĂƉƉŝŶŐƚŚĞĐƵƌƌĞŶƚ

arrangement for no annual management fee and

Woodford only being remunerated through a

performance fee.

‘Whilst Woodford IM is not receiving any annual

fee income for managing the investment trust

under the current fee structure, we think that if the

contract was removed, it could be a symbolic blow

ƚŽtŽŽĚĨŽƌĚ/ŶǀĞƐƚŵĞŶƚDĂŶĂŐĞŵĞŶƚ͕͛ĂĚĚƐ^ƟĨĞů͘

The fund

manager sold

£1m

of his own

shares in July

Neil Woodford, Fund manager