HONEYCOMB Investment Trust’s premium could be under threat due to pressure on one of its biggest shareholders, Neil Woodford, to sell off assets.
The former star fund manager dramatically suspended trading in his Equity Income Fund last month, following a flurry of customer withdrawals after a series of bad bets.
Woodford has already sold stakes in P2P Global Investments (P2PGI) and VPC Specialty Lending (VSL) to meet earlier redemptions and analysts at Numis warn Honeycomb could be next.
“Honeycomb is still trading on a premium of 8.8 per cent, but this could come under threat as Woodford IM holds a stake of 26 per cent according to Bloomberg,” Numis said.
Read more: Neil Woodford, it’s not us, it’s you
Numis has also revised its recommended investment trust list.
It has removed P2PGI, which had featured on its list since October 2017, and added VSL as a trading buy.
“We believe that the fund offers a value opportunity trading on an 18 per cent discount, after a number of technical headwinds have passed and the portfolio is delivering more consistent returns after its transition to balance sheet lending,” it said.
VSL’s latest monthly update for May reported balance sheet investments made up 1.02 per cent of gross returns,but after costs and slow performance in the rest of its portfolio, its net asset value (NAV) return for the month was 0.56 per cent.
This was down from 1.03 per cent during April.