LF Woodford Investment Fund · LF Woodford Investment Fund | Interim Report 2018 Page 2 ACD’S REPORT for the half year ended 30 June 2018 Authorised Status The LF Woodford Investment

Part of Link Group

LF Woodford Investment FundLF Woodford Equity Income FundINTERIM REPORT FOR THE HALF YEAR ENDED 30 JUNE 2018

LF Woodford Investment Fund | Interim Report 2018

AUTHORISED CORPORATE DIRECTOR (‘ACD’)LINK FUND SOLUTIONS LIMITEDHead Office:6th Floor65 Gresham Street London EC2V 7NQTelephone: 0870 607 2555 Fax: 0870 607 2550Email: [email protected](Authorised and regulated by the Financial Conduct Authority)

DIRECTORS OF THE ACDC. AddenbrookeN. BoylingB. HammondP. Hugh-SmithK.J. MidlA.J. Stuart

INVESTMENT MANAGERWOODFORD INVESTMENT MANAGEMENT LIMITED9400 Garsington RoadOxford OX4 2HN(Authorised and regulated bythe Financial Conduct Authority)

DEPOSITARYNORTHERN TRUST GLOBAL SERVICES PLC 50 Bank StreetCanary WharfLondon E14 5NT(Authorised by the Prudential RegulationAuthority and regulated by the FinancialConduct Authority and the Prudential Regulation Authority)

REGISTRAR AND ADMINISTRATORNORTHERN TRUST GLOBAL SERVICES PLC 50 Bank StreetCanary WharfLondon E14 5NTTelephone Number: 0333 300 0381Fax Number: 0207 643 3776Email address: [email protected](Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority)

INDEPENDENT AUDITORGRANT THORNTON UK LLP30 Finsbury SquareLondon EC2P 2YU


CONTENTS

Page 1

LF WOODFORD INVESTMENT FUND

ACD’s Report 2

Authorised Status 2

Securities Financing Transactions 2

Director’s Statement 3

LF WOODFORD EQUITY INCOME FUND

ACD’s Report 4

Investment Objective and Policy 4

Investment Manager’s Report 5

Fund Information 7

Portfolio Statement 18

Summary of Material Portfolio Changes 28

INTERIM FINANCIAL STATEMENTS (UNAUDITED)

Statement of Total Return 29

Statement of Change in Net Assets Attributable to Shareholders 29

Balance Sheet 30

Notes to the Financial Statements 31

General Information 32


Page 2

ACD’S REPORTfor the half year ended 30 June 2018

Authorised StatusThe LF Woodford Investment Fund (the “Company”) is an investment company with variable capital incorporated under the OEIC Regulations. The Company is incorporated in England and Wales with registered number IC001010. The head office of the Company is at 6th Floor, 65 Gresham Street, London EC2V 7NQ. This is also the address for the service on the Company of notices or other documents required or authorised to be served on it.

The Company is an umbrella company authorised as a UCITS Scheme for the purposes of the COLL and, as at the date of this set of accounts, consists of one sub-fund, the LF Woodford Equity Income Fund. The Company was authorised by an order made by the Financial Conduct Authority with effect from the 7 May 2014. The operation of the Company is governed by the Regulations, the Instrument of Incorporation and its Prospectus.

The base currency for the Company is pounds sterling. The maximum size of the Company's capital is £100,000,000,000 and the minimum size is £1.

Shareholders are not liable for the debts of the Company. Shareholders are not liable to make any further payment to the Company after they have paid the price on purchase of the shares.

Securities Financing TransactionsThe Company has the ability to utilise Securities Financing Transactions (being transactions such as lending or borrowing of securities, repurchase or reverse repurchase transactions, buy-sell back or sell-buy back transactions, or margin lending transactions). No such transactions have been undertaken in the period covered by this report.

LINK FUND SOLUTIONS LIMITEDACD of LF Woodford Investment Fund31 August 2018

Page 3

DIRECTOR’S STATEMENT


This report has been prepared in accordance with the requirements of the Collective Investment Schemes Sourcebook as issued and amended by the Financial Conduct Authority.

N. BOYLING



Page 4

LF WOODFORD EQUITY INCOME FUNDACD’S REPORTfor the half year ended 30 June 2018

INVESTMENT OBJECTIVE AND POLICY

The aim of the LF Woodford Equity Income Fund (“the Fund”) is to provide a reasonable level of income together with capital growth. This will be achieved by investing primarily in UK listed companies. The Fund may also invest in unlisted companies and overseas entities. The Fund may also invest in other transferable securities, money market instruments, warrants, collective investment schemes and deposits.

The Investment Manager may also make use of derivatives for investment purposes (gaining both long and short exposure to the underlying assets) and for efficient portfolio management. It is not anticipated that such use of derivatives will have a significant adverse effect on the risk profile of this Fund.

The full set of annual and interim Report and Financial Statements will remain available to all investors on our website (www.linkfundsolutions.co.uk) and also upon request at our head office, 6th Floor, 65 Gresham Street, London EC2V 7NQ.



Page 5

LF WOODFORD EQUITY INCOME FUNDINVESTMENT MANAGER’S REPORTfor the half year ended 30 June 2018

The first six months of 2018 represented a challenging period for the Fund, with a continuation of the momentum-driven conditions that have characterised global stock markets for much of the last two years, albeit with noticeably more volatility. Momentum investing involves buying assets when they have risen in price, and selling assets when the price has fallen, with little or no regard paid to the fundamental value of those assets. In the UK, the market has been narrowly fixated on resource-related companies and other large Asian-exposed businesses, despite declines in several key commodity prices and increasing evidence of problems in many emerging market economies, most prominently, China.

We believe that the return of volatility reflects the start of a changing investment environment, with macroeconomic developments increasingly challenging the assumptions upon which much of the market’s recent behaviour have been based. Nevertheless, the UK stock market managed to deliver a modestly positive return during the period under review, primarily through the performance of the beneficiaries of the momentum. The Fund, however, declined in value during the period. This under-performance can in part, be explained by the market’s momentum fixation but it is also the result of some specific share price movements.

The main detractor was US biotechnology business, Prothena, which announced in April the failure of the Pronto clinical trial, investigating NEOD001 in AL amyloidosis. The study identified a much bigger and more significant placebo effect than suggested by any previous trials. This was an extremely disappointing and surprising outcome and its shares fell heavily on the announcement. However, there is much more to Prothena than NEOD001. The company still has an attractive, albeit earlier-stage, pipeline of clinical assets, along with a technology platform and a world-leading specialism in misfolding proteins. Its research platform has been validated by ongoing partnerships with Roche and Celgene, and it also has its own, unpartnered assets, which are about to enter the clinic and a very strong balance sheet. The shares regained some ground during May and June, but remain well below the level at which they started the year and substantially below what we consider to be the long-term intrinsic value of this business.

Purplebricks, the disruptive hybrid estate agent, was another notable underperformer, despite the announcement of a £125m strategic investment by Axel Springer, a German digital publisher. The proceeds will be used to accelerate Purplebricks’ rollout in the US, support its entry into new markets, fund further technological innovation and expand its service offering. The company continues to grow strongly, but trading in its domestic business has been slightly behind expectations in 2018, which has prompted the weaker share price. Nevertheless, the initial performance of its US business is very encouraging, in what is undoubtedly a market with huge potential for the group. We remain very confident in the long-term outlook for the business.

Several of the portfolio’s investments in UK housebuilders also delivered a disappointing performance amid concerns about house price declines and the prospect of interest rate increases. House prices have weakened in London, but they continue to rise elsewhere in the country, albeit at a more modest pace. Meanwhile, although the Bank of England looks likely to raise interest rates in August, they are unlikely to rise far enough to undermine the attractions of shifting from renting to home ownership, or the wider structural growth opportunity that lies ahead for the UK housebuilders. As a result of the negative sentiment, however, valuations in the sector have become increasingly attractive.

The largest positive contribution to performance came from Burford Capital, a specialist provider of litigation finance. Its annual financial results, released in March, were very strong and far ahead of consensus expectations, demonstrating how well-positioned the company is in a fast-growing industry.

Unquoted artificial intelligence business, BenevolentAi also made a positive contribution to returns, following a successful funding round which took place at a pre-money valuation of $2bn. The capital will be used to scale its drug development activities, broaden the disease areas on which it focuses and extend its artificial intelligence platform capabilities into other science-based industries, such as agriculture, advanced materials and energy storage.


Page 6

LF WOODFORD EQUITY INCOME FUNDINVESTMENT MANAGER’S REPORT continuedfor the half year ended 30 June 2018

Shares in automotive service provider, BCA Marketplace, also made a positive contribution following an opportunistic bid from private equity. BCA rejected the bid, believing it to substantially undervalue the business, an assessment with which we wholeheartedly agree. The company’s very strong full-year results towards the end of the period demonstrate why, with robust growth from all areas of the business, which is firing on all cylinders.

Turning to portfolio activity, we took advantage of the weakness in housebuilder share prices to add Bovis to the portfolio, along with additions to other holdings such as Barratt Developments and Crest Nicholson. Meanwhile, we bought back into British American Tobacco towards the end of the period. We had sold the portfolio’s previous holding in the company in June 2017 at a share price above £50 and bought it back under £40. This is a high-quality business that we know well, and recent share-price weakness has returned it to the most attractive valuation territory we have seen in several years.

We also took part in the Nasdaq IPO of Autolus, which transitioned it from an unquoted holding to a listed one. Autolus is a clinical-stage biotechnology business at the forefront of a revolution in cancer treatment. The business focuses on developing and commercialising a novel class of immuno-oncology treatments known as CAR-T (Chimeric Antigen Receptor T-cells) therapies, which harness the power of a patient’s immune system to combat cancers. We believe that Autolus has a compelling technological advantage over other CAR-T businesses through its dual-targeting therapies, which engineer immune cells to recognise two cancer-specific features, meaning that there is less chance for the cancer to escape and recur. The IPO priced at the upper end of its guided range, which represented a significant uplift on the prior carrying value of the position. Since then, the shares have traded well, and we believe there is much more to come from this exciting young company.

In terms of disposals, we sold the position in AstraZeneca. The company still holds attractions for us, and we continue to believe it is on the verge of returning to growth as it commercialises its late-stage drug-development pipeline. But we are always keen to position the portfolio in stocks where the gap between current share price and long-term intrinsic value appears the widest. Given the ongoing weakness in many other portfolio holdings, which we do not believe is fundamentally justified, AstraZeneca has become less attractive on a relative valuation basis. Similarly, we also sold the positions in Homeserve, Legal & General and Next.

At the macroeconomic level, much of what we have seen in the first half of 2018 is supportive of our over-arching investment strategy, which is primarily focused towards an opportunity in domestically-exposed stocks which have been out-of-favour for some time, while avoiding the considerable risks that now exist in many other parts of the UK stock market.

Financial markets, however, have not reacted to these fundamental macroeconomic developments in the way we had expected. Market momentum has occasionally wavered but has remained a powerful force so far this year. As a result, our investment strategy has not yet been rewarded but we are absolutely confident that it ultimately will be.

Meanwhile, positive developments in some of the earlier-stage businesses that we have been nurturing, points to the long-term potential that exists elsewhere within the portfolio. Autolus is the first of several successful IPOs that we anticipate in the months and years ahead.

WOODFORD INVESTMENT MANAGEMENT LTDInvestment Manager25 July 2018


Page 7

LF WOODFORD EQUITY INCOME FUNDFUND INFORMATIONfor the half year ended 30 June 2018

RISK AND REWARD PROFILE

Lower Risk

Typically Higher Rewards

TypicallyLower Rewards

Higher Risk

4

This indicator shows how much a fund may have risen and fallen in the past, and therefore how much a fund’s returns may have varied. It is a measure of a fund’s volatility. The higher a fund’s past volatility the higher the number on the scale and the greater the risk that investors in that fund may have made losses as well as gains. The lowest number on the scale does not mean that a fund is risk free.

This Fund has been classed as 5 because its volatility has been measured as above average.

The indicator is based on historical data and may not be a reliable indication of the future risk profile of this Fund.

The risk and reward profile shown is not guaranteed to remain the same and may shift over time.

Currency Risk: As the Fund invests in overseas securities movements in exchange rates may, when not hedged, cause the value of your investment to increase or decrease.

Illiquid Asset Risk: Investment in illiquid assets, where there is no active market, may be more difficult to buy and sell and their prices may also be subject to large short-term swings.

Counterparty Risk: As the Fund may enter into derivative agreements there is a risk that other parties may fail to meet their obligations. This may lead to delays in receiving amounts due to the Fund, receiving less than is due or receiving nothing.

Financial Techniques Impact: The Fund invests in derivatives. Where derivatives are used for hedging, the risk of loss to the Fund may be increased where the value of the derivative and the value of the security or position which it is hedging are insufficiently correlated.

For full details of the Fund’s risks, please see the Prospectus which may be obtained upon application and can be found on the ACD’s website, www.linkfundsolutions.co.uk, by following the link ‘Fund Information’.


LF WOODFORD EQUITY INCOME FUNDFUND INFORMATION continuedfor the half year ended 30 June 2018

Page 8

COMPARATIVE TABLES

Information for 30 June 2018 relates to the 6 month period ending 30 June 2018. The operating charges relate to the expenses incurred on an ex post basis over the 6 month period ending 30 June 2018, expressed as an annualized percentage of the average net asset value.

A Sterling Accumulation shares

CHANGE IN NET ASSETS PER SHARE30 June 2018

pence per share

31 December 2017 pence per share


Opening net asset value per share 128.01 126.40 122.76Return before operating charges* (8.97) 2.92 4.86Operating charges (0.60) (1.31) (1.22)Return after operating charges (9.57) 1.61 3.64Distributions (2.39) (4.37) (4.21)Retained distributions on accumulation shares 2.39 4.37 4.21Closing net asset value per share 118.44 128.01 126.40* after direct transaction costs of:1 0.01 0.13 0.18

PERFORMANCE

Return after charges (7.48)% 1.27% 2.97%

OTHER INFORMATION

Closing net asset value (£'000) 41,820 58,161 76,729Closing number of shares 35,310,811 45,435,894 60,703,178Operating charges 1.00% 1.00% 1.00%Direct transaction costs1 0.01% 0.10% 0.14%

PRICES

Highest share price 128.58 139.02 132.56Lowest share price 114.37 123.73 110.82

1 Direct transaction costs are stated after deducting the proportion of the amounts collected from dilution adjustments that relate to direct transaction costs. A negative transaction costs figure might arise where there is a timing difference between inflows and the settlement of the resultant purchases.



Page 9

COMPARATIVE TABLES continued

A Sterling Income shares


pence per share



Opening net asset value per share 114.03 116.41 117.05Return before operating charges* (8.01) 2.79 4.48Operating charges (0.53) (1.19) (1.15)Return after operating charges (8.54) 1.60 3.33Distributions on income shares (2.12) (3.98) (3.97)Closing net asset value per share 103.37 114.03 116.41* after direct transaction costs of:1 0.01 0.12 0.17

PERFORMANCE


OTHER INFORMATION


PRICES





Page 10


C Sterling Accumulation shares


pence per share




PERFORMANCE


OTHER INFORMATION

Closing net asset value (£'000) 1,656,900 2,133,934 2,252,771Closing number of shares 1,385,669,447 1,653,251,857 1,771,895,634Operating charges 0.75% 0.75% 0.75%Direct transaction costs1 0.01% 0.10% 0.14%

PRICES





Page 11


C Sterling Income shares


pence per share




PERFORMANCE


OTHER INFORMATION

Closing net asset value (£'000) 745,816 1,244,835 1,647,647Closing number of shares 714,041,783 1,081,785,070 1,406,102,020Operating charges 0.75% 0.75% 0.75%Direct transaction costs1 0.01% 0.10% 0.14%

PRICES





Page 12


Z Sterling Accumulation shares


pence per share




PERFORMANCE


OTHER INFORMATION


PRICES





Page 13


Z Sterling Income shares


pence per share




PERFORMANCE


OTHER INFORMATION


PRICES





Page 14


X Sterling Accumulation shares


pence per share




PERFORMANCE


OTHER INFORMATION


PRICES





Page 15


X Sterling Income shares


pence per share




PERFORMANCE


OTHER INFORMATION


PRICES





Page 16


F Sterling Accumulation shares1


pence per share


14 October 2016 to 31 December 2016

pence per share

2

Opening net asset value per share 100.71 98.46 100.00Return before operating charges* (7.10) 2.25 (1.54)Operating charges – – –Return after operating charges (7.10) 2.25 (1.54)Distributions (1.88) (3.47) (0.67)Retained distributions on accumulation shares 1.88 3.47 0.67Closing net asset value per share 93.61 100.71 98.46* after direct transaction costs of:3 0.01 0.10 0.14

PERFORMANCE

Return after charges (7.05)% 2.29% (1.54)%

OTHER INFORMATION


PRICES


1 This class is only available for investment by the Woodford Feeder Fund (Ireland) and the Group Self Invested Pension Plan of the Investment Manager.

2 Class F Sterling Accumulation shares launched on 14 October 2016.3 Direct transaction costs are stated after deducting the proportion of the amounts collected from dilution adjustments that relate to direct transaction costs. A negative transaction costs figure might arise where there is a timing difference between inflows and the settlement of the resultant purchases.


Page 17


DISTRIBUTIONS

Share Class

First Interim 31 March 2018

pence per share

Second Interim 30 June 2018

pence per share

A Sterling Accumulation shares 0.6715 1.7153A Sterling Income shares 0.5982 1.5192C Sterling Accumulation shares 0.6772 1.7314C Sterling Income shares 0.6039 1.5347Z Sterling Accumulation shares 0.6799 1.7386Z Sterling Income shares 0.6057 1.5404X Sterling Accumulation shares 0.6601 1.6842X Sterling Income shares 0.5882 1.4932F Sterling Accumulation shares 0.5289 1.3544

Fund Performance to 30 June 2018 (%)6 months 1 year 3 years Since launch1

LF Woodford Equity Income Fund (7.34)% (13.17)% 2.57% 18.71%

1 Launch date 2 June 2014.

The performance of the Fund is based on the published price per A Sterling Accumulation Share which includes reinvested income.

The performance of the Fund disclosed in the above table may differ from the ‘Return after charges’ disclosed in the Comparative Tables due to the above performance being calculated on the latest published price prior to the period end, rather than the period end return after operating charges.

RISK WARNINGAn investment in an open-ended investment company should be regarded as a medium to long term investment. Investors should be aware that the price of shares and the income from them can fall as well as rise and investors may not receive back the full amount invested. Past performance is not necessarily a guide to future performance. Investments denominated in currencies other than the base currency are subject to fluctuation in exchange rates, which can be favourable or unfavourable.


Page 18

LF WOODFORD EQUITY INCOME FUNDPORTFOLIO STATEMENTas at 30 June 2018

Holding Portfolio of investmentsValue £'000

30 June 2018 %

SpacingOnly UNITED KINGDOM 78.64% (80.42%)

SpacingOnly BASIC MATERIALS 0.02% (0.03%)

SpacingOnly Chemicals 0.02% (0.03%)15,731,493 Itaconix1 1,062 0.02

SpacingOnly INDUSTRIALS 12.63% (10.46%)

SpacingOnly Construction & Materials 1.89% (1.57%)16,732,249 Eurocell 43,838 0.7223,347,772 Forterra 71,561 1.17

115,399 1.89

SpacingOnly Industrial Engineering 0.79% (0.93%)609,933 Industrial Heat Series 'A1' Preference2 10,284 0.17

5,170,422 Industrial Heat Series 'A2' Preference2 12,297 0.2093,384 Industrial Heat Series 'A3' Preference2 359 –47,613 Metalysis Preference2 1,141 0.02

144,000 Nexeon2 8,325 0.1423,786 Nexeon Limited2 1,175 0.02

19,700,201 Xeros1 14,874 0.24

48,455 0.79

SpacingOnly Industrial Transportation 1.71% (1.33%)74,533,224 Eddie Stobart Logistics1 104,346 1.71

SpacingOnly Support Services 8.24% (6.63%)18,430,048 Babcock International 150,684 2.4779,122,431 BCA Marketplace 173,674 2.8550,347,605 Capita 80,430 1.3210,038,698 PayPoint 93,862 1.5414,296,030 Utilitywise1 3,953 0.06

502,603 8.24


LF WOODFORD EQUITY INCOME FUNDPORTFOLIO STATEMENT continuedas at 30 June 2018

Page 19


30 June 2018 %

SpacingOnly CONSUMER GOODS 21.95% (15.87%)

SpacingOnly Household Goods & Home Construction 11.82% (8.08%)57,986,280 Barratt Developments 298,861 4.90

3,728,000 Bovis Homes 42,704 0.7020,316,670 Countryside Properties 69,768 1.1416,503,302 Crest Nicholson 64,330 1.0527,726,094 Eve Sleep1 18,299 0.3093,175,165 Taylor Wimpey 166,691 2.7330,002,000 Watkin Jones1 60,754 1.00

721,407 11.82

SpacingOnly Tobacco 10.13% (7.00%)1,900,000 British American Tobacco 72,760 1.19

19,323,095 Imperial Brands 545,105 8.94

617,865 10.13

SpacingOnly Fixed Line Telecommunications 0.00% (0.79%)

SpacingOnly HEALTH CARE 15.76% (20.14%)

SpacingOnly Health Care Equipment & Services 3.17% (3.58%)2,097,902 Cell Medica 'B' Preference2 9,000 0.152,156,310 Oxford Nanopore Technologies2 111,589 1.83

23,250,000 Oxford Science Innovation2 27,900 0.466,666,667 Phoenix Product Development2 100 –

22,173,913 Proton Partners International2 44,348 0.7311,750,000 Sphere Medical Holdings2 66 –

193,003 3.17



Page 20


30 June 2018 %

SpacingOnly HEALTH CARE 15.76% (20.14%) (continued)

SpacingOnly Pharmaceuticals & Biotechnology 12.59% (16.56%)13,091,131 4D Pharma1 27,884 0.46

240,894,215 Abaco Capital2 3,613 0.0642,791,947 Abzena1 3,851 0.06

40,934 AMO Pharmaceuticals Preference2 12,558 0.2122,317,779 Arix Bioscience 43,520 0.71

1,408,847 Autolus 'B'2 27,020 0.441,184,954 Autolus Therapeutics ADR 23,898 0.39

104,469,131 Benchmark Holdings1 63,726 1.05236,827 BenevolentAi2 193,994 3.18

18,293,690 BTG 94,304 1.5557,625,647 Circassia Pharmaceuticals 48,463 0.7936,918,214 e-therapeutics1 2,695 0.0429,810,884 Horizon Discovery1 49,188 0.8115,635,064 hVIVO1 7,505 0.12

24,737 Immunocore2 4,082 0.07239,003 Immunocore 'A' Preference2 39,436 0.65

3,454,231 Kymab Series 'B' Preference2 11,173 0.181,162,655 Kymab Series 'C' Preference2 3,805 0.06

16,853,667 Mereo Biopharma1 51,235 0.8412,085,111 Midatech Pharma1 3,384 0.0615,634,240 NetScientific1 6,285 0.10

683,995 NovaBiotics2 1,915 0.039,635,768 Oxford Pharmascience2 – –6,141,257 ReNeuron1 4,913 0.083,424,047 Silence Therapeutics1 4,571 0.08

18,250,000 Synairgen1 3,285 0.05234,212,642 Tissue Regenix1 24,592 0.40105,269,591 Vernalis1 7,369 0.12

768,264 12.59

SpacingOnly CONSUMER SERVICES 2.53% (5.03%)

SpacingOnly Support Services 0.82% (1.01%)40,415,825 AA 50,176 0.82



Page 21


30 June 2018 %

SpacingOnly CONSUMER SERVICES 2.53% (5.03%) (continued)

SpacingOnly General Retailers 0.69% (2.41%)21,225,000 Card Factory 41,792 0.69

SpacingOnly Media 0.32% (0.32%)21,540,000 Time Out1 19,601 0.32

SpacingOnly Travel & Leisure 0.70% (0.89%)13,515,751 Hostelworld 42,575 0.70

SpacingOnly Fixed Line Telecommunications 0.00% (0.40%)

SpacingOnly UTILITIES 0.00% (1.16%)

SpacingOnly Electricity 0.00% (1.16%)

SpacingOnly FINANCIALS 25.57% (27.61%)

SpacingOnly Banks 2.31% (3.44%)223,509,821 Lloyds Banking 140,856 2.31

SpacingOnly Life Insurance 0.00% (4.93%)

SpacingOnly Real Estate Investment & Services 5.22% (4.89%)59,907,800 Purplebricks1 194,820 3.1962,867,771 Raven Property 27,913 0.4681,929,824 Raven Property Preference 95,858 1.57

318,591 5.22

SpacingOnly Real Estate Investment Trusts 2.68% (2.20%)60,560,217 NewRiver REIT 163,210 2.68



Page 22


30 June 2018 %

SpacingOnly FINANCIALS 25.57% (27.61%) (continued)

SpacingOnly Financial Services 12.82% (10.58%)12,750,000 Accelerated Digital Ventures 'A'2 12,750 0.21

600 Accelerated Digital Ventures 'B'2 – –47,736,637 Allied Minds 50,123 0.8239,720,597 Atom Bank2 45,679 0.75

9,575,000 Cambridge Innovation Capital2 7,906 0.13139,355,264 IP 176,424 2.8960,090,350 Mercia Technologies1 20,431 0.3462,409,321 Non-Standard Finance 37,945 0.6243,382,122 Provident Financial 260,119 4.2660,690,731 Redde1 106,816 1.75

332,197 Retail Money Market2 12,158 0.2065,947,500 VPC Speciality Lending Investments 52,098 0.85

782,449 12.82

SpacingOnly Equity Investment Instruments 2.54% (1.57%)7,009,634 Honeycomb Investment Trust 77,807 1.289,584,514 P2P Global Investments 77,155 1.26

154,962 2.54

SpacingOnly TECHNOLOGY 0.18% (0.12%)

SpacingOnly Software & Computer Services 0.18% (0.12%)113,205,556 Brave Bison1 1,698 0.03

115,223 Drayson Technologies 'C' Preference2 9,299 0.15

10,997 0.18

SpacingOnly CHANNEL ISLANDS 12.41% (8.50%)


SpacingOnly Construction & Materials 0.92% (0.78%)68,907,090 Breedon Aggregates1 56,228 0.92

SpacingOnly Industrial Transportation 2.39% (2.19%)63,242,999 Stobart 145,459 2.39



Page 23


30 June 2018 %


SpacingOnly Health Care Equipment & Services 0.76% (0.49%)28,089,888 BPE J1 'B' Preference2 46,476 0.76


SpacingOnly Real Estate Investment & Services 1.89% (1.23%)11,773,347 Phoenix Spree Deutschland 40,500 0.66

5,000,000 Sabina Estates2 4,430 0.071,000 Sabina Estates Preference2 8,859 0.153,000 Sabina Estates Preference 12 26,577 0.441,000 Sabina Estates Preference 22 8,859 0.141,000 Sabina Estates Preference 32 8,859 0.15

27,851,839 Sirius Real Estate 17,380 0.28

115,464 1.89

SpacingOnly Financial Services 5.74% (3.45%)21,241,584 Burford Capital1 315,650 5.17

1,810,246 OMBU2 – –168,773 OMBU Preference 12 15,033 0.2474,807 OMBU Preference 22 6,519 0.1134,910 OMBU Preference 42 2,919 0.05

103,571 OMBU Preference 'A8'2 10,357 0.17

350,478 5.74

SpacingOnly Equity Investment Instruments 0.59% (0.36%)16,564,788 Crystal Amber1 35,780 0.59

SpacingOnly Nonequity Investment Instruments 0.12% (0.00%)5,447,275 Safe Harbour1 7,245 0.12

SpacingOnly IRELAND 2.32% (5.02%)


SpacingOnly Health Care Equipment & Services 0.00% (0.01%)447,115 Brandon Point Enterprises Series 22 37 –



Page 24


30 June 2018 %


SpacingOnly Pharmaceuticals & Biotechnology 1.50% (4.25%)1,801,713 Carrick2 3,332 0.057,948,790 Prothena 88,142 1.45

91,474 1.50


SpacingOnly Financial Services 0.82% (0.76%)8,400,902 Malin 49,865 0.82

SpacingOnly British Virgin Islands 0.02% (0.00%)


SpacingOnly Chemicals 0.02% (0.00%)67,436,226 HaloSource1 809 0.0143,932,126 HaloSource Reg S1 439 0.01

1,248 0.02

SpacingOnly CONTINENTAL EUROPE 1.82% (1.96%)

SpacingOnly ISLE OF MAN 0.00% (0.22%)


SpacingOnly Electronic & Electrical Equipment 0.00% (0.22%)

SpacingOnly LUXEMBOURG 0.40% (0.22%)


SpacingOnly Chemicals 0.07% (0.05%)985,360 Mafic Convertible Preference Shares 'B'2 4,439 0.07


SpacingOnly General Industrials 0.33% (0.17%)2,234,758,147 RM2 International1 20,113 0.33



Page 25


30 June 2018 %

SpacingOnly NORWAY 0.97% (1.25%)


SpacingOnly Industrial Goods & Services 0.97% (1.25%)108,420,610 Idex Corporation 24,834 0.41234,225,378 Thin Film Electronics 34,309 0.56

59,143 0.97

SpacingOnly SWITZERLAND 0.45% (0.27%)


SpacingOnly Health Care Equipment & Services 0.45% (0.27%)21,949,832 CeQur S.A. Series 'C' Preference2 27,321 0.45

SpacingOnly NORTH AMERICA 5.38% (4.34%)

SpacingOnly BERMUDA 1.07% (0.75%)


SpacingOnly Financial Services 1.07% (0.75%)35,845,833 Oakley Capital Investments1 65,598 1.07

SpacingOnly UNITED STATES 4.31% (3.59%)


SpacingOnly Chemicals 0.30% (0.23%)4,052,800 Mafic S.A.2 18,266 0.30


SpacingOnly Health Care Equipment & Services 0.32% (0.49%)1,026,410 Brandon Point Enterprises 'A' Preference2 86 –7,323,079 Evofem Biosciences 15,103 0.251,702,127 Evofem Biosciences Warrants 25/04/20252 13 –1,475,000 Evofem Biosciences Warrants 31/12/20492 1,771 0.033,664,922 Viamet Pharmaceuticals2 2,488 0.04

19,461 0.32



Page 26


30 June 2018 %


SpacingOnly Pharmaceuticals & Biotechnology 3.40% (2.55%)18,316,679 Northwest Biotherapeutics 3,555 0.06

9,963,839 Theravance Biopharma 171,606 2.8130,264,393 Verseon1 32,383 0.53

207,544 3.40

SpacingOnly TECHNOLOGY 0.29% (0.32%)

SpacingOnly Technology 0.29% (0.32%)40,998 Origin2 113 –10,000 Origin Convertible Preference 'A'2 373 0.01

8 Origin Warrants2 – –2,348,561 Spin Transfer Technology2 16,963 0.28

17,449 0.29

Forward FX Currency Contracts3 -0.46% (0.00%)$613,906,000 Sold USD for £441,257,000

for settlement on 31/07/2018 (25,358) (0.42)kr971,811,000 Sold NOK for £88,361,000

for settlement on 31/07/2018 (2,294) (0.04)€117,474,000 Sold EUR for £103,060,000

for settlement on 31/07/2018 (1,094) (0.02)CHF32,102,000 Sold CHF for £23,729,000

for settlement on 31/07/2018 (887) (0.01)£5,298,000 Sold GBP for €6,049,000

for settlement on 31/07/2018 64 –£37,093,000 Sold GBP for kr402,375,000

for settlement on 31/07/2018 443 0.01



Page 27


30 June 2018 %

SpacingOnly Forward FX Currency Contracts3 -0.46% (0.00%) (continued)£33,445,000 Sold GBP for $45,183,000

for settlement on 31/07/2018 897 0.02

(28,229) (0.46)

Portfolio of investments 6,108,473 100.13

Net other liabilities (7,717) (0.13)

Net assets 6,100,756 100.00

Comparative figures shown in brackets relate to 31 December 2017.

1 AIM listed security2 Unlisted security3 Held with Northern Trust Global Services PLC


Page 28

LF WOODFORD EQUITY INCOME FUNDSUMMARY OF MATERIAL PORTFOLIO CHANGESfor the half year ended 30 June 2018

Total purchases for the half year £'000 877,787

Major PurchasesCost

£'000

Barratt Developments 123,362Provident Financial 83,182British American Tobacco 73,041Taylor Wimpey 64,701ITV 54,487Imperial Brands 52,398Lloyds Banking 50,718Crest Nicholson 49,490Bovis Homes 41,654Theravance Biopharma 32,559Honeycomb Investment Trust 30,469Purplebricks 19,047NewRiver REIT 18,983Babcock International 17,627Autolus Therapeutics 17,351Card Factory 13,433Eddie Stobart Logistics 12,562Capita 11,724OMBU Preference 'A8' 10,357BCA Marketplace 9,644

Total sales for the half year £'000 2,323,982

Major SalesProceeds

£'000

AstraZeneca 523,083Legal & General 396,426Lloyds Banking 176,404Next 170,188Alkermes 131,692Drax 112,791Spire Healthcare 99,912CityFibre Infrastracture 85,743HomeServe 82,769Taylor Wimpey 60,583Draper Esprit 58,998ITV 54,788Burford Capital 50,264Gigaclear 40,089Countryside Properties 38,710Forterra 32,725Imperial Brands 22,320Phoenix Spree Deutschland 21,778Hostelworld 20,294Babcock International 19,904

The summary of material portfolio changes represents the 20 largest purchases and sales during the half year.


Page 29

LF WOODFORD EQUITY INCOME FUNDINTERIM FINANCIAL STATEMENTS (UNAUDITED)STATEMENT OF TOTAL RETURNfor the half year ended 30 June 2018

£'000

30 June 2018 £'000 £'000

30 June 2017 £'000

IncomeNet capital (losses)/gains (699,208) 549,939Revenue 136,182 188,298

Expenses (24,112) (33,991)

Interest payable and similar charges (275) (84)

Net revenue before taxation 111,795 154,223Taxation – (930)

Net revenue after taxation 111,795 153,293

Total return before distributions (587,413) 703,232Distributions (133,476) (187,285)

Change in net assets attributable to shareholders from investment activities (720,889) 515,947

STATEMENT OF CHANGE IN NET ASSETS ATTRIBUTABLE TO SHAREHOLDERSfor the half year ended 30 June 2018

£'000

30 June 2018 £'000 £'000

30 June 2017 £'000

Opening net assets attributable to shareholders 8,208,903 9,483,379

Amounts receivable on issue of shares 424,106 1,079,369

Amounts payable on cancellation of shares (1,903,686) (1,186,382)(1,479,580) (107,013)

Dilution adjustment 4,599 609

Change in net assets attributable to shareholders from investment activities (720,889) 515,947

Retained distribution on accumulation shares 87,723 119,531

Closing net assets attributable to shareholders 6,100,756 10,012,453


Page 30

LF WOODFORD EQUITY INCOME FUNDINTERIM FINANCIAL STATEMENTS (UNAUDITED) continued

BALANCE SHEETas at 30 June 2018

30 June 2018 £'000

31 December 2017 £'000

ASSETSFixed assetsInvestments 6,138,106 8,228,599

Current assetsDebtors 44,871 30,997

Cash and bank balances 54,264 42,309

Total assets 6,237,241 8,301,905

LIABILITIESInvestment liabilities (29,633) –

Creditors

Bank overdrafts (11,490) (39,826)Distributions payable (27,235) (18,217)

Other creditors (68,127) (34,959)

Total liabilities (136,485) (93,002)

Net assets attributable to shareholders 6,100,756 8,208,903


Page 31

LF WOODFORD EQUITY INCOME FUNDINTERIM FINANCIAL STATEMENTS (UNAUDITED) continued

NOTES TO THE FINANCIAL STATEMENTS for the half year ended 30 June 2018

1. Accounting PoliciesThe accounting policies applied are consistent with those of the annual financial statements for the year ended 31 December 2017 and are described in those annual financial statements.

The financial statements have been prepared under the historical cost basis, as modified by the revaluation of investments and in accordance with FRS102 The Financial Reporting Standard applicable in the UK and Republic of Ireland, and with the Statement of Recommended Practice (‘SORP’) for Financial Statements of Authorised Funds issued by the Investment Association (‘IA’) in May 2014, as amended.


Page 32

GENERAL INFORMATION

SHARE CAPITAL The minimum share capital of the Company is £1 and the maximum is £100,000,000,000.

STRUCTURE OF LF WOODFORD INVESTMENT FUNDThe Company is structured as an umbrella Company, in that different Sub-funds may be established from time to time by the ACD with the approval of the FCA. On the introduction of any new Sub-fund or class, a revised Prospectus will be prepared setting out the relevant details on each Sub-fund or class.

The assets of each Sub-fund will be treated as separate from those of every other Sub-fund and will be invested in accordance with the investment objective and investment policy applicable to that Sub-fund. The only Sub-fund currently available is:

LF Woodford Equity Income Fund

In future, there may be other Sub-funds of the Company.

VALUATION POINTThe valuation point of the Fund is 12.00 noon (London time) on each business day. Valuations may be made at other times with the Depositary’s approval.

BUYING AND SELLING SHARESThe ACD will accept orders to buy or sell shares on normal business days between 9.00am and 5.00pm (London time) and transactions will be effected at prices determined by the following valuation. Instructions to buy or sell shares may be either in writing to: PO Box 3733, Royal Wootton Bassett, Swindon SN4 4BG or by telephone on 0333 300 0381.

PRICESThe prices of shares for each class in each Fund will be posted on the website of the ACD: linkfundsolutions.co.uk. Prices can also be obtained by telephoning the Administrator on 0333 300 0381 during their normal business hours.

OTHER INFORMATIONThe Instrument of Incorporation, Prospectus, Key Investor Information Document and the most recent interim and annual reports may be inspected at the office of the ACD which is also the Head Office. Copies of these may be obtained upon application and, excepting the Instrument of Incorporation, can be found on the ACD’s website, www.linkfundsolutions.co.uk, by following the link ‘Fund Information’.

The Register of Shareholders can be inspected by shareholders during normal business hours at the registered office of Northern Trust Global Services PLC, 50 Bank Street Canary Wharf, London E14 5NT.

Shareholders who have any complaints about the operation of the fund should contact the Administrator in writing. In the event that a shareholder finds the response unsatisfactory they may make their complaint direct to the Financial Ombudsman Service at Exchange Tower, London E14 9SR.


Page 33

GENERAL INFORMATION continued

DATA PROTECTION ACTShareholders’ names will be added to a mailing list which may be used by the ACD, its associates or third parties to inform investors of other products by sending details of such products. Shareholders who do not want to receive such details should write to the ACD requesting their removal from any such mailing list.

Part of Link Group

www 65 Gresham Street London EC2V 7NQ

T 0870 607 2555

F 0870 607 2550

www.linkfundsolutions.co.uk

Documents

LF Woodford Investment Fund · LF Woodford Investment Fund | Interim Report 2018 Page 2 ACD’S REPORT for the half year ended 30 June 2018 Authorised Status The LF Woodford Investment