The stricken, former Neil Woodford-managed LF Equity Income fund almost halved its stake in Schroder UK Public Private Trust (SUPP), just a year after buying the then-Woodford Patient Capital Trust, at a huge loss.
A regulatory filing on Monday (18 May) showed Link Fund Solutions, the authorised corporate director (ACD) for LF Equity Income, slashed its stake in SUPP to 4.8% on Thursday (14 May), from 9% previously.
The sale comes as the open-ended fund continues its winding up process, but represents a massive writedown in value for trapped investors. SUPP closed trading on 14 May at just 24p, suggesting Link received £9.2m for part of its stake - a steep loss from the £78.9m it shelled out for its stake in March 2019.
The trust was initially added to the then-LF Woodford Equity Income fund in a sale swap, with the open-ended mandate switching its unquoted portfolio to the closed-ended vehicle as well as buying shares in the trust.
For the trust, broker Numis Securities believes the reduction of the overhang the LF Equity Income fund's stake provided was "positive for investors", despite the fund still holding a sizeable stake.
"It will give investors some comfort that there has been demand for shares, even at a wide discount, and it will be interesting to see if the names of new investors are disclosed," Numis's analysts said.
The latest move is a part of the LF Equity Income fund's winding down process, with sales of listed stocks being handled by BlackRock and Park Hill Partners charged with the unquoted assets.
The fund has already returned two tranches of cash back to investors, the first in January amounting to £2.1bn and the second in March to £143m. The fund currently has assets of £567.5m, according to data from FE fundinfo.