Schroder Investment Management is to take the reins at Woodford Patient Capital Trust (WPCT) by the end of this year, ending a period of uncertainty for investors in the beleaguered fund.
The board of the investment trust, which has been mired in uncertainty since Neil Woodford resigned as portfolio manager last week, said Schroders would run its portfolio in line with the existing investment objective and policy. The trust targets long-term capital growth by investing in both quoted and unquoted companies, with a focus on the UK.
Shares in the trust, which will be renamed as Schroder UK Public Private Trust and run using a team approach, made significant gains this morning following the announcement. But those who invest in it will face a more expensive fee structure.
Under Neil Woodford, the trust had charged a nominal ongoing annual expenses charge of 0.23 per cent, with a performance fee amounting to 15 per cent of any excess returns over a cumulative hurdle of 10 per cent a year. As the portfolio never reached this hurdle, the performance fee was never charged.
Under the new arrangement Schroders will not take a fee for three months, but after that it will charge a yearly fee of 1 per cent on the trust’s market capitalisation up to £600m, with a 0.8 per cent charge on assets above that level. From the end of 2022 Schroders will also be eligible for a fee of 15 per cent on any excess returns above a net asset value per share of 77p.
Thereafter, a performance fee of 15 per cent of any returns above a hurdle of 10 per cent of net assets each year will apply, subject to certain conditions.
The trust’s chairman, Susan Searle, said: "Following a competitive process, we are delighted to be appointing Schroders as the company’s portfolio manager. Its careful and considered long-term approach to investment, backed by its substantial research resources in both public and private assets, makes it the natural choice to manage the portfolio.”
