Invesco will sell its unquoted UK holdings to reallocate its capital to public stocks, meaning disruption for numerous spinouts and Oxford Sciences Innovation.
US-based commercialisation firm Invesco Asset Management has decided to pull out of its UK private equity holdings having erased 60% of their market valuation amid coronavirus-driven uncertainty, Reuters reported on Tuesday.
Numerous spinouts will be impacted, among them University of Oxford-founded synthetic biology services provider Oxford Genetics, which raised $8.5m at a $40m post-money valuation from investors including Invesco in April 2019.
Other Invesco-backed University of Oxford spinouts include genetic sequencing technology developer Oxford Nanopore, and the firm is also a limited partner in the university’s venture fund, Oxford Sciences Innovation.
Invesco’s departure is particularly concerning given the overlap with defunct investment manager Woodford Investment Manager, whose founder Neil Woodford worked for Invesco until 2013.
Woodford Investment collapsed during late 2019 after liquidity problems caused an investor run on its flagship fund earlier that year. Illiquid funds that nevertheless allow daily redemptions, as Woodford’s did, have come under fire from regulators, putting pressure on Invesco’s High Income and Income vehicles.
Oxford Nanopore is an example of a business to have counted both Woodford and Invesco as investors, and it is unclear where the spinout’s reported initial public offering proposal now stands.
Invesco says it plans to reinvest proceeds from its UK exit into publicly-listed stocks.
Juliet Latter, research director at Chelsea Financial Services, said in an investor’s note she felt the write-down of private holdings was “drastic” even accounting for the benefits of shifting toward more attractive parts of the market.
She added: “While there may be investor appetite for the funds to hold fewer unquoted stocks, I would doubt that investors would want this at the cost of a 5% drop in the value of their investments.”
