Fresh hope for Woodford investors? US firm reportedly closing in on a deal to snap-up his stricken fund’s biotech holdings as we pass the one-year anniversary of its closure
- US-based Acacia Research Corporation is reportedly close to snapping up Neil Woodford’s biotech portfolio for just over $300m, according to Sky News
- Today marks one year since the Woodford Equity Income fund was suspended
- It still owes £550m to investors but hasn’t said when they might expect it back
- Acacia invests in intellectual property and patented technologies
Investors trapped in the Woodford Equity Income fund could see some money sooner than they thought as the sale of its biotech portfolio is reportedly on the brink of closing.
Acacia Research Corporation is set to buy a portion of the remaining holdings in the fund, which was suspended one year ago today, for just over $300million, according to Sky News.
The US-based company, which invests in intellectual property and patented technologies, is part-owned by well-known activist funds Starboard Value.
Woodford’s biotech portfolio includes Oxford Nanopore and Rutherford Cancer Centres
The deal, which has not yet been confirmed, would see the transfer of shares in a number of up-and-coming British biotech names such as Theravance Biopharma, Oxford Nanopore and Rutherford Cancer Centres.
Talks between Acacia and Link Financial, which has been managing the sale of assets under Woodford Investment Management, reportedly took place in April.
Last year Acacia struck a deal with Starboard to provide it with with up to $400m for ‘strategic investments and acquisitions’.
Other companies have explored making an offer for the fund’s remaining assets over the past year, such as Abu Dhabi-based sovereign wealth fund Mubadala and specialist life sciences investment bank WG Partners.
Commenting on the reports, Adrian Lowcock, head of personal investing at Willis Owen, said: ‘If true, this news of a US specialist buying stakes in Woodford’s biotech holdings could be the miracle investors have been waiting for.
‘Trapped savers who put billions into Woodford’s flagship fund have seen their money locked up for a year now, so hopefully this news – on the anniversary of the fund’s suspension – comes to fruition and enables them to get some more of their money back.
‘Of course there will be questions about what value should be put on those companies, but at this stage, something would be better than nothing for investors, many of whom were concerned costs were eroding the remaining value of the fund.’
Fallen from grace
Neil Woodford was forced to suspend his Equity Income fund on 3 June 2019, just five years after it was launched, after a deluge of withdrawal requests and an extended period of poor performance.
While investors have seen two payments worth £2.3billion made back to them, there is still some £558million to be returned.
The remaining holdings are in unquoted companies, which are known for delivering high returns but are extremely high-risk and their illiquid nature is arguably what led to the manager’s downfall. For these reasons they are usually also difficult to offload.
Lowcock added: ‘What was always going to be more problematic was selling unlisted private equity investments, which were the reason Woodford got investors into this mess in the first place.’