A fund investing in early-stage / binary outcome companies that don’t pay any dividends should have gearing of ZERO. That’s just a basic common sense. What on earth was Woodford thinking? And the directors surely were asleep or incompetent. What was I thinking investing in this?

For WPCT the 20% gearing limit is only relevant at the time of borrowing. At 31.12.2018 gearing was at 19% of NAV so now as the NAV has fallen it’s very likely the gearing is well over 20%.

That shouldn’t cause any issues in itself. But of course on roll-over of the loan there’ll be some interesting discussions. In today’s lending market it’s unlikely to be a problem, except the interest rate payable by WPCT will increase due to the higher loan-to-value. And of course if there is stress in the loan markets and the loan called in, WPCT will need to do a fire sale of assets to meet the loan repayment.

So there are some risks with this holding. I have some shares but will not sell at these prices but nor will I add due to the risks you’ve mentioned here.