Susan Searle’s role at Mercia had previously raised eyebrows due to the fact Woodford held a 24.7% stake in the investment business. It is the second largest shareholder after Invesco.
However, a regulatory filing published on Tuesday did not reference the conflict of interest, instead attributing her exit, which takes place with immediate effect, to other commitments.
“I have taken the decision that now is the right time for me to step aside so I can continue to make the appropriate time commitment for my other roles,” Searle said in the release.
She remains on the board at Benchmark Holdings and Horizon Discovery, which have both been sold by Woodford in the last week. Woodford had owned 10.37% and 12.45% respectively at the time Woodford Equity Income suspended.
She also remains on the board at Qinetiq.
Immediate exit unusual
7IM senior investment manager Peter Sleep said Searle had made the right decision, but noted the fact she was exiting with immediate effect was unusual.
Sleep said: “There is usually an orderly transition, especially from the chairman, and it is telegraphed in advance and formalised at the AGM.
“It is more usual for the board to say someone is leaving and XYZ will be proposed at the next AGM to take over. Going and no replacement is suggestive of something else.”
In April 2019, Searle wrote in a statement in the Woodford Patient Capital annual financial results that steps had been taken to enlarge the scope of the audit committee to enable it “to spend even more time with the portfolio manager on its strategy and the portfolio”.
One of the duties of the audit committee is overseeing internal controls and risk management. On 28 June, the £885.8m trust announced Stephen Cohen, formerly of Mercury Asset Management, had been appointed chair of the committee.
It also announced it is currently recruiting two additional independent directors following the resignation of Carolan Dobson, who stepped down with immediate effect after three years with the closed-ended fund.
Alan Hodson stepped back from the trust on 16 May, two weeks before Woodford Equity Income suspended, having announced his intention to leave over the summer in the annual financial results published on 5 April.
“It is a bit off of them to go just when their expertise was needed,” Sleep said, noting at least Searle was sticking around to sort out the problems facing the trust.
Woodford Patient Capital is currently trading at a 31.9% discount.