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Alliance Trust

Investors impatient for shares in Woodford Patient Capital Trust

The City normally only gets excited about investment trusts when an activist investor moves in to shake-up the management, but Neil Woodford's new closed-end investment vehicle has almost made the sector sexy ... almost.

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The City has jumped on the Neil Woodford bandwagon, snapping up shares in the noted stock picker’s new investment vehicle, Woodford Patient Capital Trust.

The investment trust, which is due to float on Tuesday, had been looking to raise up to £800mln in capital, and achieved that amount comfortably, such that subscriptions had to be scaled back.

Woodford has achieved the seemingly impossible, bringing excitement into the investment trust sector.

Despite many advantages over unit trusts, the closed-ended investment companies have traditionally attracted less media interest than open ended trusts, except when activist shareholders mount occasional attempts to shake up or asset strip an investment trust.

The lack of media interest versus unit trusts might have something to do with the relentless need for unit trusts to market themselves – for instance, with adverts in the finance sections of newspapers – in order to attract fresh inflows of funds, whereas investment trusts typically recycle their own start-up capital.

Initially, the trust was only targeting £200mln in seed capital; the fact it has got four times that amount is either testament to Neil Woodford’s reputation, or a sign of a toppy market … or both.

Quick facts: Alliance Trust

Price: £8.05

Market: LSE
Market Cap: £2.66 billion
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