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Invesco begins liquidating Woodford small caps as outflows mount

(Update) Invesco Perpetual has sold shares in Capita and dumped its entire stake in one of Neil Woodford’s favoured smaller companies.

 
Invesco begins liquidating Woodford small caps as outflows mount

The Neil Woodford sell-off continues with Invesco Perpetual disclosing the sale of a slug of Capita shares on the same day it dumped other stocks to raise money for investors exiting Neil Woodford's funds.

According to an announcement on the London Stock Exchange this afternoon, Invesco sold nearly £70 million of shares in the outsourcing giant on 5 December. It still owns 21% of the company. The shares closed 6p lower at £9.99, 1% down on their level a week ago. 

Yesterday Invesco revealed it had trimmed other holdings and had sold its entire stake in one of Neil Woodford’s favoured smaller companies on the same date.

This included the disposal of all 92 million shares it held in Assura Group (AGRP.L), an investor in medical property that Woodford (pictured) has owned for at least seven years. The sale netted Invesco around £35 million; Assura's share price today is 38p, down 2.5% over the past week.

The group also offloaded 1.3 million shares in Provident Financial (PFG.L), another of Woodford’s long-standing picks, for approximately £20 million. That disposal occurred on 5 December, and Provident Financial’s share price today is 1.9% ahead over the past week at £16.26. Invesco has retained a 24% stake in the credit provider.

Meanwhile another £22 million has been taken from Drax (DRX.L) after Woodford sold 2.8 million shares in the power producer on 5 December. Invesco still owns 29% of Drax, whose share price has surged by 14.5% to £7.84 over the past week.

Woodford’s flagship Income and High Income funds have suffered significant outflows since his departure was announced in October, shedding more than £500 million in that month alone. The Financial Times has since estimated that Invesco has suffered redemptions worth more than £2 billion from Woodford's funds over this period. He is due to leave the group to set up on his own in April.

On the same day that Invesco sold its Assura stock, Artemis snapped up 43.6 million shares in the firm, taking its ownership of Assura from 8.8% to 17.1%.

18 comments so far. Why not have your say?

sgjhaghsdg

Dec 10, 2013 at 15:43

Open-ended funds and illiquid assets don't make good bedfellows.

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Daniel Lewis

Dec 10, 2013 at 16:21

I am just thinking what this must be doing to Woodford's ego.....

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George Mills

Dec 10, 2013 at 17:11

I agree

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barrie

Dec 10, 2013 at 17:22

His Ego?? What about my savings

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Keith Cobby

Dec 10, 2013 at 17:34

This shows the superiority of investment trusts/companies for the private investor.

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peter montgomery

Dec 10, 2013 at 17:41

I agree,dont buy open ended smaller company funds.This is a classic situation with all the other 'illiquids' marked down in anticipation.Inflows turn to outflows-no escape.Caveat emptor!

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sgjhaghsdg

Dec 10, 2013 at 19:02

The worst case must be open-ended and property. Any whiff of a downturn and the thundering herd run for the door, which means the fund promptly slams said door shut for months or years at a time.

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mike88

Dec 10, 2013 at 19:10

The smaller companies that are being sold off are held in Woodford's income funds (comprising mainly of FTSE 100 companies) meaning that the illiquid comments, while true in general, do not apply in this case. I could be wrong but that is my understanding.

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sgjhaghsdg

Dec 10, 2013 at 19:26

These comments maybe don't apply as much as the fund does have more opportunity to play with cap allocations to avoid selling the small caps, but we are seeing a "worst of both worlds" effect in action.

The only open-ended that I hold in any quantity are Vanguard trackers. Every gyration of the markets, and flip-flop of investor sentiment, only serves only to re-enforce my view that trackers for the majority and ITs for niche areas is the best approach overall.

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richard tomkin

Dec 10, 2013 at 22:44

If ever the advantage of investment trusts needed highlighting it is now.In a word the manager of a trust is not required to jettison promising securities to satisfy holders redeeming their units for some transient reason such as we have here.Warren Buffet did not get rich by being a forced seller.

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Neil Telford.

Dec 11, 2013 at 09:22

I've never bought into this cult of the "star fund manager".

Surely even the likes of Woodford has a team of analysts and all of Invesco's systems and resources behind him to provide input. It's not like he is sitting in his bedroom doing it all by himself.

I agree that any decent investment trust would never be put in this situation...

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Neil Telford.

Dec 11, 2013 at 09:22

I've never bought into this cult of the "star fund manager".

Surely even the likes of Woodford has a team of analysts and all of Invesco's systems and resources behind him to provide input. It's not like he is sitting in his bedroom doing it all by himself.

I agree that any decent investment trust would never be put in this situation...

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mikest

Dec 11, 2013 at 14:54

"This included the disposal of all 92 million shares it held in Assura Group (AGRP.L)......down 2.5% over the past week". So would this be a good time to take a contrarian approach? Or is Mr W simply advising Invesco which shares to dump...

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Dave Hill

Dec 14, 2013 at 01:46

I don't hold any of his funds as I don't rate him very highly. Its more hype than anything else. I've only been investing for around 5 years and in that time his funds have only been average. There have been better funds to be invested in. As he doesn't leave until April, what are the people selling going to do with their funds. Leave it in the bank to lose value, or put it into another fund, only to withdraw it when he starts on his own and so pay more in fees.

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Neil Telford.

Dec 14, 2013 at 20:09

If there ever was a moment, then now is a time to kill off this cult of the "star manager".

I suspect that if lots of money if flowing out, a lot of it is instutitional money, but a hell of a lot of it will be via IFA's.

There are lots of managers, especially those who run smaller funds or investment trusts who keep grinding out of the returns but don't gets loads of publicity.

But let's keep it that way. For f**k sake. If you want a "star" manager, why not get somebody who won the X Factor or some other crap reality TV show and put them in charge of a fund. Maybe they should get Peter Andre to come and run their funds....

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Dennis .

Dec 15, 2013 at 16:45

What this tells me is that Woodsford is no longer running the fund anyway. Someone else is making decisions about what to offload.

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Nick Taylor

Dec 15, 2013 at 21:14

Why are so many people advocating investment trusts? If a star manager such as Woodford exits an investment trust, won't the price of the IT drop much further than an equivalent unit trust/oeic because of the widening discount?

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sgjhaghsdg

Dec 15, 2013 at 21:26

A close-ended vehicle won't be forced to sell any underlying investments so a discount will only represent a real loss for sellers rather then holders.

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