June 24, 2019 / 6:04 AM / a month ago

RPT-Illiquid assets held by Woodford's UK fund pose hurdle to reopening

 (Repeats Sunday's story with no changes to the text)
    * Investors must be updated on suspension each 28 days
    * First deadline for market update falls on July 1
    * A third of holdings could take over six months to sell
    * Regulator examining some holdings listed in Guernsey

    By Simon Jessop, Carolyn Cohn and Muvija M
    LONDON, June 23 (Reuters) - Trading in Neil Woodford's 3.7
billion pound ($4.69 billion) Equity Income Fund may not be
reopened swiftly after it was suspended on June 3 because of the
illiquid assets it holds.
    The fund's authorised owner, Link Fund Solutions, must
update investors on whether it intends to keep the fund closed
to trading at least every 28 days. The first deadline is July 1.
    The main reason trading was suspended was to allow time for
the fund to sell its stakes in unlisted and illiquid assets.
This is also the main factor determining when it can reopen.
    Woodford had been trying to sell those stakes before the
suspension. His plans included moving five holdings into his
listed Woodford Patient Capital Trust (WPCT) in a March
share swap. But redemptions outpaced that effort.
    Britain's markets regulator, the Financial Conduct Authority
(FCA), said at the time of the suspension that a fifth of the
fund's assets were in such illiquid assets. 
    The illiquid assets include preference shares in four firms
listed on the Guernsey stock exchange that have never traded. 
    FCA data show how difficult it will be to reopen the fund
quickly, indicating that just 8% of the holdings could be sold
in a week. The rest are expected to take much longer to sell.
    The data showed selling 29% of the fund's holdings could
take up to a month, about 30% would require six months and
another third would need from six months to more than a year.
    "I doubt very much whether that fund will be unsuspended
until much later this year, possibly not until next year," said
Chris Bailey, analyst at Raymond James.
    Tracking Woodford's handling of the process has been made
harder since he stopped publishing a list of holdings on the
company website.
    A Woodford spokesman told Reuters on June 13 that the frozen
fund had sold 100 million pounds in more liquid listed British
stocks. He declined to offer an update when contacted on June
21.
    According to the 2018 annual report, the fund had stakes in
24 unlisted or Guernsey-listed companies, excluding those
subsequently removed in the share swap. The companies equated to
18.26% of the portfolio with a value of 850 million pounds,
based on assets under management at the end of 2018.
    The fund's investment include stakes in 14 unlisted
healthcare or biotechnology companies.
    Below are detailed of stakes in unlisted companies held by
the fund according to the annual report and updated where
available:
        
 GUERNSEY-LISTED         STAKE VALUE £     SHARE OF PORTFOLIO %                 NOTES
 COMPANIES               mln                                                    
 BenevolentAI            194               4.15(4.47 end-April, 4.9 June 11)    Listed in March 2019 
                                                                                
 IH Group                114.8             2.46(3.24 June 11)                   
 Ombu Group               45.2             0.96(0.8 June 11)                    
 Sabina Estates           85.3             1.83(2.25 June 11)                   
 Total                   439.3             9.4 (11.19 June 11)                  
 
    
 
 UNLISTED COMPANIES           STAKE VALUE £ mln       SHARE OF PORTFOLIO %   NOTES
 Oxford Nanopore              111.6                    2.38                  Share 2.57% at end-April
 Immunocore                    44.7                    0.96                  
 Proton Partners               44.4                    0.95                  Listed on Nex in February 2019
 Metalysis                      1.6                    0.03                  
 Nexeon                         8.5                    0.18                  
 Oxford Pharmascience           0.1                    N/A                   
 Oxford Science Innovation     15                      0.32                  
 Propelair                      0.25                   0.01                  
 Sphere Medical Holdings        0.04                   N/A                   
 Amo Pharmaceuticals           16.7                    0.36                  
 Kymab                         15.4                    0.33                  
 Novabiotics                    1.9                    0.04                  
 Drayson Technologies           N/A                    N/A                   8.1 mln shares
 Brandon Point Enterprises      0.02                   N/A                   
 Marlin                        65.5                    1.4                   
 Mafic                         23.4                    0.5                   
 Cequr                         32.4                    0.69                  
 Evofem Biosciences            23.93                   0.61                  
 Viamet Pharmaceuticals         4.3                    0.09                  Bought by Novaquest Cap Mgt
 Origin                         0.5                    0.01                  
 Total                        410.24                   8.86                  
 Total Guernsey, unlisted     849.54                  18.26                  
 

($1 = 0.7895 pounds)

 (Additional reporting by Samantha Machado
Editing by Edmund Blair)
  
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below