Woodford boosts biotech fund max to $1.2B as investors crowd in

Print 13 April 2015
John Carroll / FierceBiotech

When U.K. investment guru Neil Woodford outlined his initial plans for a new, publicly traded tech fund that would seek out up-and-coming biotechs for its portfolio, he pegged the fund as a $300 million player with an option to jump to $750 million if it proved popular.

Evidently, it has. Today, Woodford upsized the top end of Woodford Patient Capital Trust to $1.2 billion, or 800 million sterling.

"Over the past few days it has become clear that the concept of investing patient capital in early-stage and early-growth businesses has captured investors' imagination--so much so that we may exceed £500m during the offer period," noted Craig Newman, the CEO of Woodford Investment Management.

Woodford has been playing a big, and growing, role in the U.K. investment scene since launching the £5.1 billion CF Woodford Equity Income Fund shortly after his spotlight turn at Invesco. Biotechs in the U.K. have been struggling to raise money at a time many in the investment community retain bitter memories of past failures. But the guru has reckoned--evidently correctly--that investors will back his picks in the field, which are expected to feature prominently in the trust.

Woodford's not alone. Jim Mellon has been working out plans for his own publicly traded trust. And Woodford has been careful to try and insulate his trust from some strong sentiment that Nasdaq-traded biotechs may be operating in a bubble, noting that the investment drought in the field has created some great opportunities.

"I think there is a bubble in some parts of the quoted biotech sector, certainly in the U.S. There are some pretty punchy valuations that I certainly wouldn't feel comfortable with," Woodford noted in a recent interview with The Telegraph, his favorite media outlet. "But that doesn't describe all biotech valuations everywhere. In the unquoted space and in early-stage biotech companies in the U.K. there is no cross-contamination from Nasdaq valuations at all. These valuations of U.K. biotech businesses … frankly are on the floor." 

Shares in the new trust are expected to start trading on the London Stock Exchange April 21.

Source

Return