The valuation of a Neil Woodford stock has been slashed 70% in a venture capital deal hitting investors in the fallen star fund manager’s former flagship fund and investment trust.
A regulatory filing from the Schroder UK Public Private trust, previously the Woodford Patient Capital Trust, revealed its next valuation for net asset value at the year’s end will see the value of Ombu downgraded 71%, from £14m at the start of the quarter to £4m.
The cut to valuation is due to the acquisition of the company’s entire share capital by UK venture capital firm Hambro Perks.
The Schroder UK Public Private Trust, managed by Tim Creed (pictured) and Ben Wicks, said the price tag offered was due to “a number of shareholders” seeking a cash exit and was “more reflective of the shareholder dynamics surrounding Ombu, than a fundamental assessment of the portfolio value”. As such, the £518m investment trust reached an agreement with Hambro Perks to exchange its stake in Ombu for a partnership interest in the HP Environmental Technologies fund (HPET).
The Schroder UK Public Private Trust did not state which shareholders were seeking to make a quick exit from the investment, but the company is held by both Link Fund Solutions, via Woodford’s former equity income fund, and Invesco, via Mark Barnett’s former funds.
LF Equity Income held a 2.77% weighting at 31 March via six different tranches of shares, according to its annual report. Portfolio Adviser has also seen documents showing Invesco UK Equity Income held two tranches of shares totalling a 0.28% weighting as of the end of November.
Invesco is currently in the process of ridding its UK equity income products of unquoted companies.
Ombu was one of a trio of companies controversially listed on the Guernsey stock exchange in the lead up to the Woodford Equity Income fund suspension. Although the company barely traded, its listing on the stock exchange allowed Woodford to stay within liquidity limits that meant only 10% of his fund could be exposed to unquoted companies. The company ended up being booted from the exchange.
Portfolio Adviser has sought comment from LF Equity Income about the Ombu holding and is awaiting a response.
Schroder UK Public Private Trust told shareholders the portfolio it has acquired via HPET will be managed by Stephen Brooke, Duncan White and Sir John Rose. Hambro Perks will provide operational support to Ombu’s existing management team and access to capital as the portfolio scales.
By Jessica Tasman-Jones, 21 Dec 20