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Allied Minds deals more pain to Woodford and Barnett

Allied Minds deals more pain to Woodford and Barnett

Allied Minds (ALML) has delivered more pain to high profile investors Neil Woodford and Mark Barnett, falling 16.6% to 217.7p after the company, which commercialises intellectual property from universities, announced it was likely to take a $146.6 million write-down.

The tech and life sciences 'incubator', which houses a series of subsidiaries, said it would discontinue funding for seven, accounting for $146.6 million of its assets, and look to either sell or liquidate them.

'It is currently expected that this value will be marked down in its entirety on publication of our full-year results, but with some modestly offsetting net positive movements elsewhere in the portfolio,' Allied Minds said in a statement.

The news represents the latest blow to Allied Minds investors, with the shares down 47% over the last month and more than 70% lower than April 2015's 729p peak.

Citywire A-rated Woodford is the company's biggest investor, with a 1.8% holding in his £9.7 billion Woodford Equity Income fund representing an 18.4% stake.

Allied Minds is meanwhile a top 10 holding for his smaller Woodford Patient Capital (WPCT) investment trust, which holds 3.2% of its assets in the company.

Woodford built up a stake in the company at his previous firm Invesco Perpetual. Barnett, his successor in the business, has maintained a stake, with his £11.1 billion Invesco Perpetual High Income fund holding a 1.5% stake at the end of last year and his £5.6 billion Income fund holding 1.3% at the end of September.

Allied Minds boss Chris Silva left last month, with non-executive director Jill Smith taking as interim chief executive. Smith said the write-down was 'a necessary step in refocusing the company on the areas where we have the most potential'.

'While many of the discontinued subsidiaries have demonstrated progress against technical milestones, the path to commercialisation is unlikely to yield appropriate financial returns,' she said.

'At the same time, there is an opportunity cost of diverting capital consumed by these subsidiaries from investment in some very promising areas of the portfolio and in scaling our pipeline and partnerships.'

The company was hit by a double downgrade by analysts at Jefferies last week, who cut their rating to 'underperform' from 'buy' and slashed their target price from 584p to 254p on a prescient warning that while Allied Minds was likely to focus on its strongest subsidiaries, 'short-term write-downs of the remainder seem more likely than sudden value uplifts.'

Allied Minds' woes also represent a victory for New York hedge fund firm Kerrisdale Capital, which launched a blistering short-selling attack in September 2015, dubbing the company 'a dressed up collection of high-risk low reward gambles' and warning the shares could fall by 'at least' 70%. Since their intervention, the shares are down 58%.

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