Where next for Woodford Patient Capital shares after hitting all time low?
Shares in Neil Woodford’s Patient Capital Trust took a major tumble after news broke that the Woodford Equity Fund will be wound down four months after being suspended.
Neil Woodford’s Patient Capital Trust (WPCT) fell by more than 6% on Tuesday after investors were told that the flagship Woodford Equity Fund (WEIF) will be wound down on Tuesday.
WPCT shares then fell further 7% on Wednesday to 32p after Woodford resigned and informed investors that he was going out of business.
In the wake of the announcement, WPCT shares are now trading at a 50% discount to their net asset value (NAV) of 64p, but Numis Securities analyst Sam Murphy warned investors to remain cautious.
‘Typically, a fund trading on a 50% discount to NAV would present a clear buying opportunity, however we remain cautious until there is greater clarity on the nature and valuation of the portfolio,’ said Murphy told Citywire.
Neil Woodford hopes to close funds in ‘orderly fashion’
Woodford said that it was a ‘highly painful decision’ to wind down the two funds but planned to do so in an ‘orderly fashion’.
‘The future now looks incredibly bleak for [Woodford Investment Management],’ Morningstar analyst Peter Brunt said.
‘The main life source of the company, fees charged for the management of assets, has been essentially cut off – it has not received fees on its investment trust for years and is no longer receiving fees on its former flagship fund.’
The decision to close both funds also brings about the end of one of the City’s most successful stock pickers, who at his peak managed more than £14 billion.
‘I personally deeply regret the impact events have had on individuals who placed their faith in Woodford Investment Management and invested in our funds,' Woodford said in a statement.
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