Neil Woodford, the Star fund manager, has dropped his stake in Atom Bank, a challenger bank, amid a £1bn decline in the value of his flagship fund.
Woodford Investment Management refused to participate in the £150m share issue of Atom Bank which was revealed last week.
Following the rights issue, the stake of Woodford in Atom Bank will decline from 20 to 18 percent.
The said decision not to stump up the cash was first reported by Sky News. It comes following a torrid start to 2018 which obeserved his key fund decrease by £1bn during the first five weeks of the year.
Stakes in Capita, an outsourcer, and Purplebricks, an online estate agency, have been the main factors behind the poor performance of this year.
The value of the 11 percent stake of Woodford in Capita, the struggling outsourcer, has fell in recent weeks after a collapse in its share price, while the stake of Woodford in Purblebricks has also dropped in value after Jefferies analysts claimed that the firm had hidden the real number of homes that it was selling.
A Woodford spokesperson stated: “Neil has to make decisions about the allocation of capital all the time.
“When we sell, or don’t participate in a funding round, it is not a function of an inability to follow on, but typically a function of our preference to focus our capital on businesses earlier in their lifecycle or which have the potential for more attractive returns.”
A recently revealed rights issue for Provident Financial, the doorstep lender, and an investment in OxSyBio, a biotech company, are some of hte recent investments of Woodford.
The report that Woodford had refused to support the share issue of Atom Bank as first reported by Sky News.