Neil Woodford loses key ally from investment trust

Neil Woodford has lost a key ally at his investment trust as he continues the fight to reinstate the suspended fund he manages.

Steven Harris, chief executive of Circassia Pharmaceuticals, has stepped down from the board of the Woodford Patient Capital Trust at the same time as its members are considering whether to part company with Mr Woodford.

The trust is a listed business that contains the various investments Mr Woodford and his suspended fund have sunk funds into.

Board members will ultimate decide whether they want to continue with Mr Woodford at its helm, following suspension of the £3.1 billion Equity Income fund in June.

Last month the trust was forced to write down the value of one of its holdings and has seen the trust’s share price fall more than 50% this year.

Relations have been rocky between Mr Woodford and the trust after he sold £1 million of shares to fund a tax payment.

Since suspending the fund, Mr Woodford has vowed to reinvest customers’ cash into more listed shares of larger companies, rather than in various smaller, unlisted ventures, where cashing out can be far harder.

Investment rules say funds should only invest around 10% of their clients’ money into unlisted businesses, but Mr Woodford’s fund circumvented this by investing into listed trusts, which are holding companies for the unlisted businesses.

Mr Harris’s departure comes not long after Mr Woodford relinquished his position as largest shareholder in Mr Harris’s Circassia Pharmaceuticals.

Mr Harris is replaced on the board by Jane Tufnell, an experienced investment trust director.