Neil Woodford's bizarre bet on cold fusion hit by writedown

One of Neil Woodford’s most controversial investments, cold fusion company Industrial Heat, had its valuation slashed by 35% on Friday in an embarrassing U-turn on the firm’s prospects.

Woodford’s investment in the nuclear energy tech start-up, founded by eccentric Italian inventor Andrea Rossi, raised eyebrows as many scientists poured scorn on cold fusion technology.

It prompted further confusion when it was written up by 357% on Woodford’s books last September by valuation firm Link despite not making any money.

On Friday Woodford Patient Capital Trust, the listed vehicle run by Woodford, indicated that the Industrial Heat stake of £88 million had been written down by £30 million, or 35%, analysts estimate.

Link said this was because the firm’s development “had not progressed at the rate upon which previous reviews were based”.

Shares in the £715 million Patient Capital Trust, which has Industrial Heat as its top holding, fell 6% to a record low of 40p.

That means a client who put £10,000 into the trust when it launched in 2015 have lost £6,000.

Woodford Equity Income Fund, the shuttered £3.5 billion fund, also owns a £115 million stake according to December 2018 data.

That would have fallen to £75 million today. A Woodford spokesman said: “Woodford is not responsible for unquoted valuations across any of its funds.”