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Woodford eyes further Patient Capital fundraising

Neil Woodford is considering a further fundraising for his Patient Capital trust now he has deployed the proceeds of the record £800 million launch.

Woodford eyes further Patient Capital fundraising

Neil Woodford is considering a further fundraising for his Patient Capital trust now he has deployed the proceeds of the record £800 million launch.

In a brief stock market update, the trust said: 'With the current market conditions in mind, the board of the company is currently looking at ways it can raise additional capital in the year ahead and will consult with, and gauge interest from, investors.'

The trust initially targeted £200-£500 million but this was raised to £800 million in response to strong investor demand when it came to market last April. The board said in August that it could raise a further £80 million after issuing a further £4.6 million in shares.

The latest announcement suggests a larger fundraising could be on the cards though as Woodford believes there are plenty of untapped opportunities out there.

Mark Dampier, head of research at Hargreaves Lansdown, said with the trust currently having 60 holdings, he would expect this to increase by 20 to 30 with some existing investments also topped up. This could potentially suggest a further fundraising of up to £200-300 million.

Although he backs the trust's mandate, Dampier warned any further fundraising could result short-term share price weakness.

Dampier said: 'It must be said, that if and when there is a capital raise, a new large tranche might cause the trust’s share price to fall to a discount (to its net asset value) in the short term.

'However, the fact Woodford believes the investment case remains so strong is good for the long-term investor, although there are no guarantees of future performance.

He added: 'In my view, any new money raised should not fundamentally change the reasons for holding the trust for the long term - Woodford’s only reason to consider this would be the opportunities he believes are out there. Long-term investors, who take the trust’s name literally and are patient, should be rewarded.'

Since launching at 100p, the trust's net asset value has fallen to 92.83p, although its share price has been largely static at 99.4p as it is trading on a 7.1% premium, according to AIC data.

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