Manager of RC Brown’s MFM Primary Opportunities fund Oliver Brown has for the third time made purchases of shares being offloaded by Woodford Investment Management in the wake of the liquidity crisis engulfing the Equity Income fund.
Woodford was the second-largest shareholder in healthcare-focused firm IP Group with a 20% stake, before offloading the company in September as part of the ongoing overhaul of the Equity Income fund.
Brown confirmed in an update to investors seen by Investment Week that he had picked up the some of the shares last month among four other primary opportunities.
IP Group is an investment company comprising of holdings in early stage companies, providing seed capital and resources in return for equity in companies spun off as a result of research. It invests in 12 companies that are also owned by funds run by Woodford investment Management (WIM), the largest of which is Oxford Nanopore, which accounts for 24% of IP's portfolio. The other 11 firms represent 10% of its portfolio as of September.
Brown said that "due to the large nature of the overhang and the market's knowledge that Woodford needs to raise money", the fund was able to buy the shares at a "13% discount to the prevailing price".
He added: "The shares have moved higher since and continue to trade at a significant discount to net asset value."
IP Group's share price has moved up 7.9% over one month to 3 October, according to FE data.
Elsewhere, Brown said the fund had taken advantage "of the sharp rebound in sterling and bond yields to modestly add to our holdings in Diageo and RELX, following weakness in their shares as a result of their overseas earnings weighting".
It follows Brown's July purchases of bowling alley operator Ten Entertainment Group (TEG) and home credit provider Morses Club - both of which were also purchased from Woodford.
Since the beginning of July, TEG's share price has risen 4.8%, while Morses Club is down 12.9% over the same period.
MFM Primary Opportunities fund is down 4.6% over one year to 3 October, and has returned 23.8% and 49% over three and five years respectively, according to FE.