It was a mixed bag for Neil Woodford’s Patient Capital Trust on Monday, as one of his largest holdings received a boon from an oversubscribed financing round and another warned it could go bust by the end of December.
In a portfolio update, the star manager announced that one of the key holdings in his £844m trust, Ultrahaptics, had raised £35m in a new financing round.
The firm which harnesses ultrasound technology to allow users to experience the sensory feeling of objects in virtual reality is a spin-out from the University of Bristol and owned by intellectual property firm IP Group, which is also majority owned by Woodford.
After factoring in this latest founding round into account it now has a projected market cap of £150m.
Going bust
The news comes as another Patient Capital holding, Halosource, saw 40% shaved off its share price after revealing it could be going bust later this month.
The London-listed company which specialises in providing clean water technology said it only managed to scrape together $2m of its initial $5m to $7m fundraising target which it needed in order to break even and to avoid becoming insolvent.
Halosource’s shortcomings slightly offset the trust’s share price gains at the start of the week. Shares in the closed-listed fund were up 1.24% to 90p.
Halosource makes up a much smaller weighting of the Woodford Patient Capital Trust compared with Ultrahaptics at just 0.05% of the portfolio versus 2.79%. It also has a small position in the star manager’s flagship equity income fund (0.03%).
However, Woodford’s investment boutique owns 27.3% of the clean water group, according to its website, behind his former employer Invesco, which owns 27.4% via Mark Barnett’s UK equity income funds previously run by Woodford.
Halosource considering alternatives
Halosource said in a stock announcement on Monday that it would be seeking “alternative strategic options” to keep the business afloat.
It had planned to use the proceeds to fund several major projects, including rolling out its astrea water bottle filter on Amazon and in stores across the US, securing Sur La Table as its first retail customer.
If it does not receive additional funding, Halosource has said its cash will run out by the end of December.
Last Friday, the Woodford Equity Income fund also ran into trouble after one of its largest holdings, construction group Kier, launched an emergency £264m rights issue to get a handle on its growing debt problem.
It is currently the most shorted stock in the UK by percentage of market cap, with 14% of the stock out on loan to short sellers.
Woodford owns 8.2% of the construction group, according to Bloomberg.
Ultrahaptics
Woodford has invested in Ultrahaptics since October 2015.
He owns 18% of its parent company IP Group as well as sizeable stakes in a handful of its portfolio companies, including Genomics, hVIVO and Oxford Nanopore.
His former employer Invesco remains the largest shareholder in IP Group, owning 30% of the business and holds controlling stakes in many of the same portfolio companies owned by Woodford.
Shares in IP Group rose 4.5% to 122p on Monday morning off the back of the news. Despite the fresh funding for several of its subsidiary companies this year, IP’s shares are still down 15% year-to-date.
