The London-based cancer treatment company, which Woodford owns a 15.9% stake in, began trading on the Nasdaq Global Select Market last Friday at $17 per share, a 51% premium to the carrying value in the Woodford vehicle.
The Patient Capital Trust made a gain of 238% on total cash invested, according to a regulatory filing published on Tuesday. The IPO effectively added 3.2p to the trust’s NAV, equivalent to a 3.8% upward shift.
The stock is the eighth largest holding in his £771.6m Patient Capital trust, representing 4.7% of the portfolio, and also makes up 0.15% of his flagship £6.2bn Equity Income fund.
Winterflood Securities said in an investment note the rally in Autolus’ share price was a reminder of the potential value of unquoted companies in the firm and balances out the disappointment from Prothena, which saw its share price tank 70% after halting development on its star drug.
Bumpy performance
However, given the trust’s high concentration in a small handful of investments, many of them unquoted, Winterflood cautioned “performance is unlikely to be smooth or in line with any index” in the short-term.
At the end of May, the top-10 holdings represented 55% of the investment trust.
Woodford Patient Capital Trust performance
| 1m | 3m | 6m | 1yr | 3yr | |
| Woodford Patient Capital Trust | 10.12 | 3.16 | -2.28 | -13.28 | -28.17 |
| IT UK All Companies | -0.09 | 9.20 | 6.43 | 12.04 | 27.81 |
Source: FE Analytics
Winterflood said near-term performance would be driven by the trust’s top three holdings – Benevolent AI, Oxford Nanopore Technologies and Proton Partners International.
The firms, which are all unquoted companies, account for 26.31% of the portfolio.
“We would also expect its share price and rating to continue to be more volatile than the NAV given the significant proportion of the portfolio invested in unquoted companies and given the media attention generated by the manager’s successes and failures,” the broker added.
Winners and losers
That said, Winterflood said Patient Capital remains an attractive proposition for investors with longer-term time horizons and higher risk appetites. It also applauded its “innovative fee structure”.
Fees are only paid to Woodford if NAV beats a 10% per annum compounding target, which the broker said provides alignment between manager and shareholder interests.
“Due to the high-risk, potentially high-return approach taken by Woodford Patient Capital … it is inevitable that the portfolio will contain both winners and losers,” said Winterflood.
“For the fund to be successful, in our view, it will need to develop an asymmetric return profile at the portfolio level (losers can lose 100% but winners have the potential to return more than 100% of invested capital).”
But with the NAV still below launch level, this strategy needs to develop further, it added.
