Questions have been raised about the independence of two directors at Neil Woodford’s £855m Patient Capital Trust after a report in The Times reveals they have jobs at companies in which the fund owns a stake.
According to The Times, Patient Capital Trust chairwoman Susan Searle is also deputy chairwoman of Mercia Technologies, a quoted investment business that backs high-growth technology companies mainly in the Midlands and north of England.
She is also non-executive director at Benchmark Holdings, a supplier to the sustainable food and farming industries.
Meanwhile Patient Capital director Scott Brown is chief executive of Nexeon Limited, a battery materials and licensing company.
The news comes after the Patient Capital Trust reported a disappointing year.
According to results published on Tuesday, in the year to December shares in the fund fell by 7.2 per cent from 91p to 84.45p.
Meanwhile, the trust’s net asset value per share fell 2 per cent.
In the 2015 prospectus for Woodford Patient Capital, the firm said that while the directors would help oversee investment strategy, the potential for conflicts were recognised and none of the directors would manage assets in the portfolio on decide on individual stock picks.
A Woodford spokesman says: “When Woodford launched WPCT, it intentionally sought a board with extensive experience in the types of early-stage companies that the trust invests. It was also aware that by choosing such a board there might be situations where it invested in companies in which the directors were involved.”
He adds: “Woodford has robust procedures in place to ensure it mitigates any potential conflicts – the most crucial one being that the board has no involvement in the investment process or the day-to-day investment decisions, which are made solely by Neil and his team.”
The spokesman says in July 2016 two non-executive directors with experience in the investment trust sector were appointed to the board.
There was more bad news for Woodford on Monday, when shares in US biotech firm Prothena – which has exposure across all three of his funds – crashed by nearly 70 per cent.