Schroders swaps out co-manager on former Woodford trust

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21 September 2021

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Schroders UK Public Private (SUPP) will be installing a new co-manager as Ben Wicks prepares to step down from Neil Woodford’s former trust.

The trust’s half-year results published on Tuesday revealed Wicks (pictured) would be taking a leave of absence from Schroders to go on paternity leave. Upon his return he will relinquish control of the trust to focus on his roles as head of research and innovation and co-leader of Schroders’ Data Insights Unit.

Wicks had managed the £363.5m trust’s listed equity portfolio, while Schroders head of private equity investments Tim Creed looked after its unquoted holdings.

The board has approved Roger Doig to succeed Wicks effective immediately. Doig has been at Schroders for the past 14 years, most recently as a senior analyst in the pan-European equities team. He has been “working closely” with Wicks and the wider equity team on the mandate since Schroders took control in late 2019 following the collapse of Neil Woodford’s fund empire.

Doig will be supported by Jack Dempsey who has worked on several UK and European strategies since joining Schroders as an analyst in 2016 and recently became lead manager on the Schroder ISF Italian Equity fund.

Creed will continue to manage the trust’s private investments with support from Schroders’ specialist private equity team.

Succession planning highlights benefits of Schroders’ team-based approach

Shares in the trust tumbled as early trading began but were up 2% on the previous close at 33p by midday.

Independent wealth expert Adrian Lowcock was positive on SUPP’s succession plan which he said “reflects the benefits of the trust being run by a well-resourced team”.

“While a change in manager can cause some disruption, Schroders have focused on ensuring the trust has the right resources at its disposal and any impact will hopefully be limited,” Lowcock said.

SUPP sees 16% uplift to NAV

SUPP’s half-year results revealed one of the strongest periods for the trust in recent years. Its net asset value surged 16.1% from 35p per share to 40.7p per share in the six months to 31 June 2021, while its share price rose 7.9% to 33.5p.

The uplift in NAV was driven by several positive developments in the portfolio including the significant rerating of Oxford Nanopore, Immunocore’s IPO and the sales of Inivata and Kuur Therapeutics.

But Wicks and Creed’s progress has been slow, impeded by Woodford’s legacy holdings, some of which have suffered steep writedowns.

SUPP has delivered a share price return of -60.3% over three years compared to the IT Growth Capital average of 9.9%, according to Trustnet, and on a one-year view has returned 19.3% on a share price basis, less than half the sector’s 41.5%.

Its shares are currently trading at a 19% discount to NAV, according to data from the Association of Investment Companies.

Performance issues to be expected following Woodford ‘rot’

Lowcock said performance issues were to be expected as the management team dealt with “the rot following the Woodford crisis” to restructure the portfolio and put it on the right foot.

But he added certain holdings are starting to bear fruit, with the trust’s largest holding Oxford Nanopore preparing to float on the London Stock Exchange in the second half of the year. The ex-Woodford biotech holding is currently 26.5% of the portfolio but Creed and Wicks are planning to realise part of their stake.

SUPP chairman Tim Edwards noted in the results that the managers had made further strategic process in rebalancing the portfolio. Using the proceeds from the basket of sales to Rosetta Capital and Sanofi’s acquisition of Kymab, Creed and Wicks initiated their first new investments, buying stakes in Tessian and Revolut.

By the end of June gearing in the portfolio had been reduced to zero. The board expects to reduce the size of the trust’s revolving credit facility from £55m to £40m, an amount which “better reflects the board’s and Schroders’ anticipated prudent use of gearing”.