Woodford Patient Capital Trust, the second fund to be launched by Neil Woodford's investment company, is to increase the maximum size of its initial public offering (IPO) from £500m to £800m because of high investor demand. The trust was originally targeting £200m with leeway to invest up to £500m, but says there has been so much interest demand it may even exceed £500m.
"We are extremely excited by the level of support we are getting from investors and where we can, we want to avoid scaling back investors' applications, which would likely occur if the final interest is greater than £500m," said Craig Newman, chief executive of Woodford Investment Management. "The scale of the upsizing is in keeping with the trust's investment strategy and will not impact its objective or portfolio construction."
The trust will invest in early growth companies, typically quoted; and quoted and unquoted early-stage companies, which are expected to have a significant exposure to medical science. "We have an attractive pipeline of investments in the wings for Woodford Patient Capital Trust and are relishing the greater flexibility that this level of interest affords," said Mr Newman.
Woodford Patient Capital Trust will have 50 to 100 holdings predominantly from the UK.
Instead of charging an annual management fee the investment trust will earn a performance fee which will be payable in ordinary shares. It is aiming for a return in excess of 10 per cent a year over the longer term.
Although the trust is proving popular, investment advisers are cautioning that it will be much higher risk than CF Woodford Equity Income Fund (GB00BLRZQ513), which Woodford Investment Management launched in June last year and we now count as an IC Top 100 Fund. Advisers such as Adrian Lowcock, head of investing at AXA Wealth, say that it is only suitable for long-term investors and should be considered riskier than other smaller companies funds because it will invest significantly in unquoted investments.
The offer for subscription closes on 17 April and Woodford Patient Capital will be admitted to trading on 21 April.
