A boutique manager specialising in investment trusts has initiated a 7.9% stake in Neil Woodford’s former trust as Link offloads the shares from his former Equity Income fund.
City of London Investment Management Company snapped up shares in Schroder UK Public Private Trust, formerly known as Woodford Patient Capital, last Wednesday, an RNS filing showed.
It now owns a 7.9% stake in the £476.8m trust representing around 72 million shares.
Schroder UK Public Private shares have been trading at a record discount since managers Ben Wicks and Tim Creed took over in December thanks to considerable baggage from the investment company’s crossover with holdings in Woodford Equity Income, which is in the process of being liquidated, high levels of gearing and the emergence of Covid-19.
The fund’s share price has fallen 29% since then, worse than the FTSE All Share’s 21% decline, widening its discount from 38% to 55%.
When City of London IM established its position on Wednesday the trust’s share price was trading at a high of 25.53p and low of 24.80p. But since the RNS announcement on Friday shares in the trust have spiked and by Tuesday morning were up around 27.66p, their highest level since early March.
City of London IM currently has five investment trusts in its stable, including a $3.2bn emerging markets fund and a $774m developed markets strategy. Its products are aimed at institutional investors.
A RNS filing from 21 April shows the holding company City of London Investment Group having US$4.4 billion (£3.6 billion) in funds under management at the end of March following the coronavirus sell-off, down from $6.0bn or £4.5 billion at the end of December.
Schroder UK PPT managers Wicks and Creed revealed during a webinar presentation earlier this month that over a quarter of their investment companies would have “significant problems” as a result of the virus crisis and likely require a further round of financing in the next 12 to 24 months. This follows earlier warnings that Covid could wipe up to 8% off the trust’s net asset value.
But Wicks and Creed have said 40% of their holdings would benefit from the current situation, including biotech firms Benevolent AI and Oxford Nanopore which are helping in the fight to combat coronavirus.
Since the coronavirus sell-off began on 20 February the Schroder UK Public Private has slumped further than the IT Growth Capital sector, losing investors 22.6% versus the average peer’s losses of 5.7%.
