* Portfolio value down 21% since June
* Fund says talking to other managers about taking over
* Illiquid portfolio under pressure (Recasts, adds detail from statement, shares)
By Lawrence White and Simon Jessop
LONDON, Sept 30 (Reuters) - Woodford Patient Capital Trust (WPCT) wants to boost investment in unlisted stocks and move away from daily pricing of its net asset value, it said on Monday, as it reported a 21% drop in its value since the end of June.
Neil Woodford’s only listed fund has been under pressure since the money manager’s flagship fund was frozen in June. The trust said on Monday the outlook remained tough.
Woodford’s 3.7 billion pound ($4.7 billion) LF Woodford Equity Income Fund (WEIF), a darling of British retail investors, was suspended on June 3 after it struggled to sell its illiquid assets quickly enough to meet redemption requests.
Since then, investors have fled WPCT amid concerns that the frozen fund’s need to sell would hit the value of its assets, some of which are also held in the trust.
That concern has been borne out in recent weeks as the administrator of both, Link Fund Solutions, cut the valuation of a number of the trust’s holdings, including BenevolentAI.
The trust said it had faced particular pressure as market participants anticipated its need to sell some of its investments by selling first, further reducing their value.
“This has undoubtedly been the most challenging period for the company since it floated in 2015. Events at the portfolio manager have been disappointing for everyone,” Chairman Susan Searle said.
While WPCT has been updating the market daily with the valuation of its assets, it said in a half-year report on Monday that assets had fallen to 591 million pounds ($727 million) on Sept. 26, from 748 million pounds on June 28.
WPCT also said it was considering a move to report the fund’s net asset value on a quarterly or monthly basis rather than daily, to allow more time for analysis of its investments.
The trust was also speaking to shareholders about amending its mandate to allow it to invest more than 80% of its assets in unquoted companies, so that it can provide funding to its investee companies.
The board of WPCT in late June said it planned a series of actions aimed at boosting confidence, including overhauling its governance structure, cutting debt and increasing oversight of Woodford’s dealings.
The fund said it had reduced its borrowing during the period to 111.1 million pounds from 116.1 million pounds, after exiting two unquoted investments, ADV and Ultrahaptics, with further possible deals in the pipeline.
It also confirmed it was continuing to discuss replacing Woodford as manager of the fund.
“This process can take time and ultimately the board’s decision will be that which is in the best interests of protecting long-term value for shareholders,” Searle said.
Last week, Link said the WEIF still aimed to reopen in December.
$1 = 0.8128 pounds) (Additional reporting by Carolyn Cohn; editing by Raissa Kasolowsky and Jason Neely)