A consortium led by a specialist life sciences investment bank is close to entering exclusive talks to buy £500m of healthcare assets accumulated by the fallen star fund manager Neil Woodford.
Daily Week News has learnt that WG Partners, which has assembled a cluster of financial and industry backers including pharmaceuticals investor Ricanto, is the frontrunner to buy roughly 15 positions held by Woodford Investment Management (WIM).
Insiders said the WG-led consortium could secure a period of exclusivity within which to conclude a deal as early as Monday.
The prospective deal comes weeks after Mr Woodford – arguably Britain’s best-known retail fund manager – announced that he was shutting his firm amid a deepening crisis.
Other bidders for the portfolio of stakes in listed and privately owned healthcare companies included Rosetta Capital, a life sciences-focused venture fund, and Omega, a hedge fund.
The overall portfolio being pursued by the WG Partners consortium is understood to be valued at close to £500m, according to one insider.
It excludes WIM’s holding in BenevolentAI, which uses artificial intelligence to aid drug discovery and which recently saw its valuation halve in a funding round led by the Singaporean state fund Temasek Holdings.
Among the companies included in the proposed transaction are Oxford Nanopore, a DNA sequencing specialist; 4D Pharma, a biotherapeutics specialist; Mereo BioPharma Group, a rare diseases specialist quoted in New York and London; and Rutherford Health, a listed proton beam therapy business formerly called Proton Partners.
The Woodford Equity Income Fund, suspended earlier this year, will not re-open, the company managing the fund has said.
The company stakes vary widely in size and value, and a deal is expected to take several weeks to conclude.
WG is said to be in the process of finalising the necessary financing to complete the acquisition.
Mr Woodford became Britain’s most prominent biotech investor, but has seen many of those bets turn sour amid uncertainty about the companies’ ultimate chances of success.
The sale, which is being overseen by PJT Park Hill Partners, also includes stakes in Arix Bioscience, Immunocore, Kymab, Verseon and 4D Pharma, according to insiders.
Once completed, the deal will mark a further step towards the winding-up of Mr Woodford’s eponymous asset management firm.
Months of difficulties for the former star stock-picker culminated last month in Link Financial, the supervisor of Woodford Investment Management (WIM) funds, announcing that it was firing him as the manager of his Equity Income Fund.
Mr Woodford subsequently threw in the towel and said he was closing his firm five years after its launch attracted billions of pounds from ordinary savers.
WIM’s demise is the fund management sector’s most dramatic since New Star collapsed during the financial crisis, and has sparked fury among savers and politicians.
Mr Woodford is now facing intense scrutiny from regulators and lawyers who believe there may be scope to bring claims against his firm.
Investors in his funds are expected to crystallise substantial losses as a result of the crisis, while Mr Woodford has faced intense criticism over the fees he continued to charge even after his flagship fund was closed to redemptions.
The nightmare engulfing the former Invesco manager has also raised questions about his relationship with fund supermarkets such as Hargreaves Lansdown, which has sought to present itself as a frustrated onlooker since WIM’s Equity Income Fund was suspended in June.
Some of Mr Woodford’s biggest publicly quoted stakes, such as those in the construction group Kier and the logistics company Eddie Stobart Logistics, have seen their value plummet amid company- and sector-related problems.
On Monday, the Woodford Patient Capital Trust, which is now being managed by Schroders rather than Mr Woodford, said it was marking down the value of its holding in Industrial Heat, a cold fusion technology company.
Efforts to float some of WIM’s illiquid private holdings have also run into difficulty, while stakes held by the firm in companies such as Atom Bank and Ratesetter are also being auctioned.
Last month, Mr Woodford said: “I personally deeply regret the impact events have had on individuals who placed their faith in Woodford Investment Management and invested in our funds.”
Spokesmen for WG and WIM declined to comment on Monday.