Neil Woodford’s Patient Capital Trust will be handed over to Schroders, the board has confirmed.
The FTSE 100 fund group is expected to take the reins of the £574.5m investment trust by the end of the year, at which point it will be rebranded as the Schroder UK Public Private Trust plc.
Shares in the trust, which have been trading at a massive discount since Woodford stepped back from the mandate, spiked over 15% to 35p shortly after markets opened.
The board said Schroders will manage the portfolio in line with the trust’s existing investment objective and policy and will target unquoted and quoted companies for the long term.
The fund house will use a team-based approach to manage the portfolio focusing on sectors like healthcare and technology.
Chairman Susan Searle 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.”
Schroders will not take a management fee for the first three months upon appointment after which point it will take a cut of 1.0% per annum on market capitalisation up to £600 million and 0.8% per annum thereafter.
Performance fees will not be payable until after 31 December 2022 at which point Schroders will be eligible to a fee of 15% of any excess returns above a net asset value (NAV) per share of 77p.
The last reported NAV was 63.23p on 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.
