The Schroder UK Public Private trust has been burned by another of Neil Woodford’s unquoted holdings, Kind Consumer, which collapsed into administration last week.
Sky News reported last week that the nicotine inhaler maker, which manufactured products under the Voke brand, had appointed administrators from Smith & Williamson after failing to secure fresh funding to keep the business afloat.
The collapse is set to trigger tens of millions of pounds of losses for investors, including former Tesco boss Terry Leahy and venture capitalist Jon Moulton. Former star manager Woodford was also among Kind Consumer’s prominent backers, ploughing money into the e-cigarette alternative via his Patient Capital trust.
The business had raised around £140m from investors since launch in 2006, according to Sky News.
Schroders claims Kind Consumer collapse will not materially impact NAV
Among the scorched investors is the Schroder UK Public Private trust which inherited Woodford’s unquoted holdings, including Kind Consumer, after taking over the fallen manager’s Patient Capital Trust a year ago.
Kind Consumer was one of Schroder UK Public Private’s 20 largest holdings at the end of June, making up 0.9% of NAV, according to its interim report.
Schroders did not confirm the trust’s current exposure to the nicotine inhaler maker. But a spokesperson said the administration would not have a material impact on NAV due to the size of the holding.
Schroder UK Public Private trust managers Tim Creed and Ben Wicks have already been stung by a handful of unquoted investments previously owned by Woodford, including Atom Bank, Ratesetter and Mission Therapeutics, which suffered a £37m hit to valuations amid the Covid crisis.
The trust’s unquoted investments, which make up three quarters of the portfolio, endured a 10% haircut during the first six months of the year, wiping 8.1% off NAV which fell from 49.46p to 45.44p per share.
See also: Schroders trust stung by ex-Woodford unquoteds as Covid crisis delivers £37m in writedowns
Earlier this year Creed and Wicks estimated that over a quarter of their investments would require additional financing in the next two years thanks to Covid but warned it would not be “an endless source of capital” for former Woodford holdings.
At the time they said certain chunky healthcare holdings like listed business Rutherford Health, as well as unquoted stocks Oxford Nanopore and Benevolent AI had benefitted from the pandemic with the latter two receiving backing from international investors.
Investors told not to expect any money back
Kind Consumer has agreed to sell its assets for just £1.6m to OBG Consumer Scientific, the subsidiary of private company Pharmaserve.
Chief executive Alan Sutherland is understood to have told shareholders it is unlikely they will be able to recoup any money from the sale.
Prior to its collapse Kind Consumer had been gearing up to relaunch its Voke range in 2022. Founded by Alex Hearn in 2006, the company entered into a distribution deal with British American Tobacco but the two businesses parted ways in 2017.
