Star fund manager Neil Woodford eyes 10 per cent returns with new fund backing start-ups

 
Jessica Morris
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The Woodford Patient Capital Trust will target 10 per cent returns (Source: Getty)

Star fund manager Neil Woodford is launching an investment fund focused on start-ups and early-stage businesses with high growth potential.

The Woodford Patient Capital Trust, which will target annual returns of 10 per cent "over the longer term," is seeking to raise £200m from an initial public offering (IPO) in April.

Interestingly, the fund will charge a performance-based fee rather than a standing fee, and its manager will be paid in shares of the fund itself "further aligning [their] interests with shareholders".

The trust will invest in larger, mid-sized companies before moving into smaller, early stage firms. It wants "50-100 holdings with exposure to early-stage and early-growth companies growing over time".

"Patient capital is the missing component for many companies and the reason why great innovation hasn't translated into commercial success for the UK economy," said Woodford.

"Patient capital investors work closely with early-stage businesses and help nurture them to achieve commercial success. It takes involvement, flexibility and above all, it takes time."

While the fund will be focused on companies that are domiciled in the UK, it could also buy into US firms

Woodford built his reputation as one of the country’s most successful managers at investment group Invesco Perpetual. After over 25 years he left to start his own firm called Woodford Investment Management in 2014. He has £9.3bn of assets under management, including £4.7bn in his Woodford Equity Income Fund.

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