Dublin-listed life sciences investment firm Malin has dismissed concerns that the liquidation of the company's former top shareholder will hit the valuations of three key holdings in its portfolio, in which both are investors.
Neil Woodford's Woodford Equity Income Fund (WEIF), which ran into trouble in June and sold off its 23 per cent Malin holding at the end of last month, was put into liquidation on Tuesday by its administrators, Link Fund Solutions. Mr Woodford has also been ousted as manager of the fund.
The fund remains a co-investor in three of Malin’s four main investee companies: Immunocore, whose key pipeline product is an eye cancer treatment; Kymab, which is working on a treatment of eczema; and Viamet, which focuses on antifungal products.
“We welcome the announcement regarding the sale of all outstanding WEIFs stakes and the clarity it brings to Immunocore, Kymab and Viamet,” a spokeswoman for Malin said in response to questions from The Irish Times.
“These sales in an orderly fashion, as confirmed by Link, will allow the companies to progress their businesses and remove the uncertainty that this situation has caused over the past few months.
“These transactions are one-off events by a distressed seller and don’t impact the underlying value of these businesses.”
Development milestones
The spokeswoman said that Immunocore, Kymab and Viamet each have important development milestones for their main pipeline projects “which have the potential to be significant value inflection points for the businesses”.
Mr Woodford built his reputation at London-based Invesco Perpetual, where he worked for more than 20 years. When he left to set up his own company in 2014, many investors followed.
Mr Woodford had built up a reputation by correctly calling major swings in technology, tobacco and other stocks over decades. The stock picker, after starting his eponymous investment firm, shifted the focus of his flagship fund from large-cap equities, to smaller companies.
The fund included an almost 97 per cent allocation to micro-, small- and mid-cap stocks at the end of May. That was up from 40 per cent in January 2016. In his first year on his own, Mr Woodford’s equity income fund gained 16 per cent, beating all 50 of its peers tracked by Bloomberg. But over the last three years, he was among the laggards.
In early June, the WEIF moved to block investors from taking money out of the fund as a steady outflow of funds over the previous 23 months threatened to turn into a stampede.
Liquidate
While it had been envisaged that the withdrawals ban would be lifted in December, Link has now decided that the best move would be to liquidate its investments and wind it up.
The UK regulator said it welcomed the removal of uncertainty following the decision.
"Winding-up the fund will allow the return of money to investors through a number of distributions, likely to begin in January 2020," according to a statement from the Financial Conduct Authority. "This means investors should receive some of their money back sooner than had the fund remained suspended for a longer period." – Additional reporting, Bloomberg
