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Woodford Patient Capital – manager serves 3 month notice

Woodford Investment Management has given three months' notice to the Woodford Patient Capital Trust board.

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

Further to our notes yesterday, it has been confirmed that Woodford Investment Management is closing their business.

This will impact investors in the Woodford Income Focus Fund and the Woodford Patient Capital Trust.

The board of Woodford Patient Capital has confirmed that Woodford Investment Management yesterday served notice of termination in relation to its role as Portfolio Manager.

The announcement states that the Portfolio Manager has a three-month notice period, and that the board expects to provide shareholders with further details as to the future management of the trust soon.

The announcement states:

"During its three-month notice period, WIM has committed to work collaboratively with the Board and its advisers throughout this transition period in order to protect the interests of shareholders. The Board is in advanced discussions in relation to the ongoing management of the Company’s portfolio and expects to be in a position to announce details of the new management arrangements shortly."

We will update clients with further information as the WPCT board discloses it.

  • What is net asset value (NAV)?

    The net asset value (NAV) is the value of all the assets owned by the investment trust, usually stated as a 'per share' figure. If the holdings of an investment trust, less any debt, are worth £1 million and there are two million shares in issue, the NAV per share is 50p.

    If the trust's assets increase in value, the NAV will grow, and vice versa. Growth in NAV over time is used to measure the performance of the manager.

  • What are premiums and discounts?

    The share price of an investment trust can differ from the net asset value (NAV). If the current share price is above the NAV, the investment trust is said to be trading at a premium, i.e. it costs more to buy the shares than the underlying investments are worth. When the share price is below the NAV, this is known as trading at a discount.

  • Why do investment trusts trade at a premium or discount to net asset value?

    An investment trust’s share price is determined by supply and demand. In theory, if more people are willing to buy than to sell at the current price, the price will rise. Similarly, the share price will fall if there are more investors selling than buying.

    If a trust or the area in which it invests is particularly popular, demand might push the share price to a premium over the NAV. A trust or area that is out-of-favour could trade at a discount to NAV.

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

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