RC Brown Buys IP Group Shares As Woodford Offloads Stake

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RC Brown has bought up shares being offloaded by Neil Woodford as the fund manager struggles with the crisis that has swept across his investment management firm.

RC Brown’s MFM Primary Opportunities fund has purchased shares in intellectual property firm IP Group after Woodford shed his 20 per cent stake last month. 

Read more: Woodford Patient Capital Trust accused of stretching rules on unquoted holdings

It is the third time that the fund, run by lead fund manager Oliver Brown, has snapped up shares from Woodford at a discount in the last few months having already taken a stake in Ten Entertainment and Morses Club. 

Woodford is being forced to sell-off illiquid assets in his flagship Equity Income fund, which was suspended in June after a spike in investor redemption requests. 

Last month it was revealed that Woodford had lost at least £43.5m in selling off stocks from the frozen fund, and had lost money on eight out of ten positions he has sold.

Link, which is overseeing the suspension, has said it expects the fund to reopen in early December.

Woodford has promised that the fund will have a more liquid portfolio when it reopens. 

The Financial Conduct Authority has issued tougher rules on funds that invest in hard-to-sell assets following the scandal that has engulfed Woodford’s firm.

The watchdog said investors should be given better warnings about the risks they face if they want to withdraw funds at short notice. 

Read more: Watchdog calls for clearer investor warnings in wake of Woodford saga

Under the new guidelines, the FCA will introduce a new category of funds that invest in inherently illiquid assets (or FIIA) in September 2020. 

The funds will be subject to additional requirements including a requirement to produce liquidity risk contingency plans and must suspend dealing when there is “material uncertainty” regarding over 20 per cent of its assets.