According to the Trust’s fund manager, Neil Woodford, while the initial focus of the fund was building up positions in mid and large-cap holdings like AstraZeneca, GlaxoSmithKline , Rolls Royce and Legal & General, which make up around a quarter of the portfolio, these holdings have weighed on early performance, with GlaxoSmithKline and AstraZeneca in particular performing poorly over the period.
The group has also moved to build out positions in unquoted firms, among them, Proton Partners International and Oxford Sciences Innovation.
According to the firm, Proton Partners’ primary business is to bring proton beam cancer therapy centres to the UK. The firm has already begun work on its first site in Newport in Wales and announced in July the second site will be in Northumberland.
Oxford Sciences Innovation, is according to Woodford: “a critical new link in Oxford’s science innovation infrastructure” and is an important part of the UK’s burgeoning technology commercialisation industry.
“There are several more unquoted businesses in the pipeline which we would expect to enter the portfolio over the remainder of the year,” Woodford added.
The firm has exposure to the US biotech sector through investments in Prothena and Northwest Biotherapeutics.
While acknowledging that there are some areas of the US biotech sector that are trading on “bubblelike valuations, Woodford said the investments within the trust do not exhibit such characteristics.
“We have focused our exposure on stocks where future potential is, in our view, significantly undervalued by the market – Prothena, Northwest Biotherapeutics and Alkermes, all trade on valuations more in line with those we see on this side of the Atlantic. Hence, each of them represents significant positions in the portfolio.”
Susan Searle, Woodford Patient Capital Trust chair said: “While clearly it is early days, we are confident that this initial performance is indicative of the investment management team’s ability to identify and invest in innovative, disruptive, typically science-based businesses at attractive valuations.”
She added the firm intends to implement a tap issuance programme through broker, Winterflood Securities in order to “satisfy excess demand in the secondary market”.
She said the decision was taken in light of the current premium rating of the firm’s shares and said new shares issued will only be issued at a premium to net asset value and will be accretive to existing shareholders.
