Woodford Patient Capital Trust suffered a 4 per cent drop of its net asset value in 2016 in a “more challenging year” for the firm.
In its annual results for 2016, published today, the firm says the NAV declined “modestly” from 97.4p to 93.2p, but currently stands at around 94.6p.
The share price declined more than the NAV by 9.9 per cent with the trust now trading at a -2.4 per cent discount, moving from a 3.7 per cent premium.
With dividend of 0.16p over 2016, the trust saw a losses of 8.9 per cent. Over the same period the FTSE All Share has returned 10.4 per cent.
Fund manager Neil Woodford says: “I understand that some investors may be disappointed at the net asset value progress thus far and, although I would have preferred to have been writing this review having delivered a positive return, it must be remembered that the investment strategy was never designed to deliver significant short-term wins.”
He adds: “For patient capital investing to be a success, one has to work through the difficult periods. My approach has always been to favour voice over exit, which means overcoming hurdles to continue to support and nurture businesses that I retain my long-term faith in.”
The 60 per cent of the trust made of quoted companies has been a detractor of performance by 5 per cent. The remaining part of the fund, which is made of unquoted firms, returned more than 2 per cent for the year.
Hargreaves Lansdown senior analyst Laith Khalaf says: “Woodford Patient Capital has started slowly for shareholders, but this is a marathon not a sprint, and there are few managers who can keep up with Neil Woodford over the full distance.
“There have been some high profile casualties within the portfolio to date, notably Allied Minds, Circassia and Northwest Biotherapeutics, but part and parcel of investing in early stage companies is overcoming occasional setbacks.”
Woodford says firms such as WPCT have to work closely with the early-stage businesses they have already supported “but this ultimate goal can take years, sometimes decades, to fulfil”.