A £550mln deal to rescue a portfolio of investments made by Neil Woodford in biotech startups has collapsed, raising concerns it might lead to a fire sale of 20 companies.
Boutique investment bank WG Partners tried to assemble a group of investors to save the fund’s illiquid holdings but missed the deadline.
Administrator Link Fund Solutions is overseeing the liquidation of the holdings of Woodford's former flagship fund, which was suspended last June after a wave of redemption requests.
In late January, Equity Income investors received their first payout, worth between 48p and 58p for a pound, following the sale of the listed portion of the portfolio by BlackRock.
Park Hill, a division of PJT Partners Inc (NYSE:PJT), is working with Link to try and sell the remaining 26% of the portfolio, made up of the illiquid holdings, which are harder to sell.
These include stakes in small biotech firms, such as gene analysis company Oxford Nanopore, a company said to be worth over US$1bn.
In November, PJT Partners granted WG Partners a period of exclusivity to find a group of investors willing to purchase the biotech portfolio but the deal has now fallen through.
“It is in the best interests of all investors for the fund to be wound up on the basis of an ‘orderly realisation’ of the fund’s assets, which involves the sale of the fund’s assets over a reasonable period of time,” Link told City AM.