Is Oxford Nanopore's Plan To Go Public A Boon For Woodford Investment?

  • Apr 03, 2019 BST
  • Team Kalkine
Is Oxford Nanopore's Plan To Go Public A Boon For Woodford Investment?

United Kingdom-based nucleic acid analysis company, Oxford Nanopore Technologies, has core operations that include providing nanopore-based electronic molecular analysis for the anatomy of single molecules including DNA, RNA and Proteins. The nucleic acid analysis company has announced its plan to debut in the stock market in the next 12 months, and this gave a bestow to Neil Woodford, a British Fund Manager.

Last year, Amgen a California based biotech, acquired a 3% stake in the gene analysis company in a deal in which Oxford Nanopore was valued at £1.5 billion. Stellar commercial and technical success of the UK based nucleic acid analysis company indicates it can go public on a higher valuation. Some analysts estimate that the company is heading for a valuation between £4.5 bn to £7 bn in the medium term. 

Oxford Nanopore's plan to go public within twelve months could be a blessing for the UK based Woodford Investment management company, which is struggling to keep his bellwether fund compliant with regulations that limit investment allocation in the non-quoted assets.

The UK based fund manager had assets under management (AUM) of £10.2 bn in its Equity Income Fund in May 2017, but post regulatory changes investors have withdrawn money every month and now total assets under management (AUM) stood at £4.7 bn. To meet the redemptions by the investors, the fund manager has liquidated its investment in quoted securities, meanwhile, it has elevated weighing of his unquoted portfolio.

Last year, fund’s exposure in the unquoted securities was surpassing 9.5 per cent, savagely close to the threshold limit of 10 per cent set by the financial regulators. However, the rule has a clause that if a privately held company is planning to go public within twelve months, that can be considered as quoted securities from erstwhile unquoted securities.

Woodford’s Equity Income Fund has 7.76 per cent exposure in unquoted asset classes, but the proportion falls to 5.4 per cent post-reclassification of Oxford Nanopore.

As per some media report, post Oxford Nanopore pitched Mr Neil Woodford, the founding partner of Woodford Investment Management, about their debut in the stock exchange within the next twelve months, the fund manager sold Nanopore's 2.15 million shares back to the company, which were then cancelled and reissued by the company as new securities.

Woodford through its various investment vehicles has 12.5 per cent stake in the nucleic acid analysis company Oxford Nanopore Technologies, including exposure through its Equity Income Fund.

Woodford Investment is a United Kingdom-based investment management company. The company’s investment approach is focused on value discovery, not price discovery, and rigorous fundamental analysis of the companies coupled with long-term macroeconomic outlook and variables. Neil Woodford is the Investment head at Woodford Investment Management Ltd.

Woodford has classified its investment under four categories, which are Income Focus Fund, Equity Income Fund, Patient Capital Trust and Equity Income Feeder Fund.

In an interview, Mr Neil Woodford has said that “the nucleic acid analysis company had no reason to go public and also they don’t like public market.

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