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Woodford Patient Capital gets 357% energy boost

Woodford Patient Capital gets 357% energy boost

Shares in Woodford Patient Capital Trust (WPCT) have jumped on the back of a significant increase in the value of one of its disruptive holdings in the technology sector.

Link Fund Solutions, the trust’s appointed alternative investment fund managers, has upgraded the value of Industrial Heat by 357% to $112.9 million (£85.2 million).

The upgrade has lifted the net asset value of WPCT by 8.02p per share.

The news is a welcome boost for the fund after it published its first half numbers yesterday, showing its net asset value edged up 0.7% over the period, although 0.5% of this has since been given up. 

At 1pm, WPCT shares, which launched at 100p over three years ago, had shot up by 5.4% to 86.23p. 

Based in the US, Industrial Heat was founded in 2012 and specialises in cold fusion, which is sometimes referred to as 'low energy nuclear reactions'. 

WPCT manager, Neil Woodford (pictured), first bought in the company in 2015, investing £32 million of client money in the firm. 

Commenting on the value upgrade, the investment company told the market: 'Industrial Heat has built a platform of new energy technologies focused on harnessing hitherto poorly understood or neglected energy science, including cold fusion.

'Despite its potentially disruptive implications, scepticism has historically surrounded this branch of science. We funded Industrial Heat to engage credible world-leading institutions to rigorously assess the claims of research groups in the field.' 

It added: 'Over the course of the past eighteen months, there have been developments within Industrial Heat's portfolio of technologies that have shown increasing promise.

'Hence, with the company raising capital from other investors to continue the path to commercialisation, the valuation of the company has been adjusted to reflect this progress.' 

'Although, this is positive progress for Industrial Heat and the Trust, it remains early days in the development and commercialisation of these technologies.' 

The news comes a little more than a year after Industrial Heat settled a legal battle with scientist Andrea Rossi, who claimed he was owed $89 million by the firm for the use of his invention. 

Winterflood analyst Kieran Drake said the announcement demonstrated that the trajectory of this type of business was not always linear. 

'The manager followed Industrial Heat for a number of years before the launch of WPCT and it has been part of the portfolio since launch. It has not been a smooth progression, with the failure of one of the company’s initial technologies and involvement in litigation leading to it being written down,' Drake said. 

'[However] it broadened its platform of technologies and it has clearly received enough external validation of progress that it has been able to attract funding from additional institutional investors at a significantly higher valuation.' 

The trust's discount has narrowed from 16% to 11% over the last month on the back of some positive news for its holdings, including the flotation of Autolus, the listing of Sensyne Health and Kymab moving to phase three trials on its key treatment.

Earlier this month, Crystal Amber, the activist fund backed by Woodford, disclosed it had invested over 2% of its assets in WPCT as it traded at its April lows.

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