Neil Woodford has defended Allied Minds after its $146.6m plans to restructure sent shares plummeting 16 per cent.
The fund manager, who is the largest shareholder in the intellectual property company with a 28 per cent stake, described the price movements as “short-term noise”, The Times reports.
Woodford says the restructure, which sees it cut funding for seven ventures, means Allied Minds can focus more aggressively on the companies that are progressing towards their commercial goals and reallocate capital towards new ideas.
Woodford says his firm remains strong supporters of the intellectual property commercialisation sector.
He argues the model works best when small amounts of capital are deployed at a very early-stage across a wide range of businesses, and more capital is selectively deployed as and when those companies demonstrate successful progress against milestones.
Woodford adds that it is natural that not all ventures will fulfil their potential and that while withdrawing funding is an important discipline and sends a positive message to shareholders about a management team’s intent.
Earlier this week another Woodford holding, P2P Global, was in the news due to an announcement that it was reviewing its investment management arrangements following disappointing performance.
The share price plunged 20.7 per cent over 2016.