Jeremy Beckwith: So one of the most important features of investment trust, is that the share price is determined by buyers and sellers and the price at which they are happy to transact. This can be very different from the actual value of the assets within the investment trust. So what we've seen particularly with the Woodford Patient Capital Trust over the course of this year is that share price has gone up and up as everybody wanted to buy their shares at a much faster rate than the actual value of the assets inside the fund.
Earlier this week the share price got to be about 120p whilst the assets in the fund were only worth about 105p, so a very big discrepancy. So the Woodford Patient Capital Trust decided this week to sell more shares, because there is a lot of demand for them. So they were able to sell another large slug of shares at 115p.
Now for shareholders this has two effects, one negative and one positive. The short term negative effect is that share price fell from 120 to 115 because of this placing of shares. However on a longer term basis if you look at what's actually the real value of the company the underlying assets of the company they have actually gone up, because the company was able to sell shares for more than they are actually worth, and therefore their asset value per share has actually gone up because of this transaction.