Questor: hang on to Woodford Patient Capital as its holdings make solid progress

The manager doesn’t appear to have lost his belief in the fund’s prospects, however. At an “investor day” in London last week Woodford said: “We said to judge us on our three to five-year outcomes. We never promised instant returns. I could not be more confident that we will deliver on what we said three years ago.”

One professional investor at the event, at which several of the companies in the portfolio gave presentations, was Peter Hewitt, who runs the F&C Managed Portfolio Trust, a fund of investment trusts.

• Would you buy Woodford Patient Capital in the hope of recovery? Comment in the box below

He told Questor: “What is needed to improve sentiment towards the Woodford trust is some good news from a few of its holdings and at the investor day I sensed quite a bit of progress at the operational level among those companies.”

One was Oxford Nanopore Technologies, the trust’s largest position at 10.7pc of assets. “Oxford Nano, which was spun out of Oxford University, makes DNA sequencers the size of a mobile phone,” Hewitt said. “The potential market is huge – they could one day be in every biology classroom, for example.”

The company is valued at around £1.5bn and its order book is increasing by 300pc year-on-year, according to Woodford Investment Management.

Hewitt pointed out that the stock was also held by some of the highly regarded investment trusts run by Baillie Gifford. He said another promising holding was Proton Partners International, which is developing a network of “proton beam” cancer treatment centres. It accounts for 5.8pc of the investment trust’s assets.

• Read Questor’s rules of investment before you follow our tips. See Questor's tips every day at twitter.com/DTquestor

“Proton beam therapy differs from other treatments because it targets just the tumour and not the healthy tissue around it,” Hewitt said. “It can’t treat every type of cancer but there are thousands of people in Britain it could be used to help and the company aims to open about 15 treatment centres so that everyone in the country is within easy reach of one.”

One, in Newport, has already opened and Hewitt said further centres should open within the next year or two.

He added: “There is no question that many of the trust’s holdings are making progress and becoming less risky. The problem is that most are unlisted and difficult to value. The trust needs one or two of them to list to get validation of their valuations.”

One, Autolus, which develops “T cell” therapies to fight cancer, is due to float shortly on the Nasdaq hi-tech market in New York and Hewitt said he suspected that Proton Partners could follow once its network of treatment centres was more established.

• Questor archive: telegraph.co.uk/questor

“The underlying holdings give me confidence,” he said. “If I didn’t already have a stake in the trust I would be tempted to buy now. I think the shares could go quite a lot higher over the next year or two if we see good news from some of the holdings and that causes sentiment to improve and narrow the discount.”

The trust remains riskier than most and we shouldn’t expect an immediate recovery, but now is not the time to sell.

Questor says: hold

Ticker: WPCT

Share price at close: 74.3p

Investment trust news

Montanaro UK Smaller Companies, tipped here in February last year, intends to split its shares on a five-for-one basis, meaning that the share price will fall by 80pc on the day of the split. Shareholder approval is needed.

Fidelity China Special Situations, tipped in March last year, is to adopt a new variable management fee on July 1. The base fee will be 0.9pc of net assets but it can be increased to 1.1pc or reduced to 0.7pc according to performance. The existing performance fee will be scrapped.

F&C Global Smaller Companies has announced its 48th successive annual dividend increase.