Woodford Weighs Sale of Stake in Subprime Lender NSF

(Bloomberg) -- Struggling stock picker Neil Woodford is considering exiting part or all of his stake in U.K. subprime lender Non-Standard Finance Plc, people with knowledge of the matter said, as the crisis-hit investment manager looks to liquidate more of his holdings.

Woodford Investment Management Ltd. has received interest from a number of institutional investors willing to purchase its NSF stock, the people said, asking not to be identified because the information is private. The firm is NSF’s second-largest investor with a 24% stake valued at about 26 million pounds ($33 million) based on Thursday’s closing price, data compiled by Bloomberg show.

The placing could be announced as soon as next week if Woodford decides to move ahead, according to one of the people. A deal could result in new institutions joining the share register of London-based NSF, the person said.

NSF recently dropped a hostile bid for larger rival Provident Financial Plc. The potential sale comes after the Oxford-based star investment manager last month gated his flagship equity fund after over concerns at investor withdrawals.

No final decisions have been made, and there’s no certainty that Woodford will be able to reach an agreement on a sale, the people said. Representatives for Woodford and NSF declined to comment.

Losses at Woodford’s fund sent investors rushing for the exit. The decision to bar withdrawals came after Kent County Council, a longtime backer of Woodford, asked for the return of about 250 million pounds it had invested. Woodford also lost the backing of other early supporter St James’s Place, which cuts its ties with his firm in early June, terminating an investment mandate.

Last month, Woodford raised at least 300 million pounds from selling down some of the stakes held by the LF Woodford Equity Income Fund. Among the investments cut by the firm were holdings in BCA Marketplace, NewRiver REIT Plc and Oakley Capital Investments, according to public filings and data compiled by Bloomberg.

Shares in NSF have nearly halved this year and the stock is trading close to historic lows, partly on concerns that Woodford may be forced to exit his stake as he looks to liquidate parts of his portfolio.

To contact the reporters on this story: Harry Wilson in London at hwilson57@bloomberg.net;David Hellier in London at dhellier@bloomberg.net;Suzy Waite in London at swaite8@bloomberg.net

To contact the editors responsible for this story: Ben Scent at bscent@bloomberg.net, Ambereen Choudhury, Amy Thomson

©2019 Bloomberg L.P.