Surgery for a sick Patient

Everything neil Woodford touched has left a trail of destruction and despair. nothing more so than the quoted Woodford Patient Capital trust, with the shares falling a further 4.1pc in latest trading to just 30.35p and now selling at a 50pc discount to asset value.

the secret to this Woodford outfit was meant to be in the name, with investors supporting the idea of a trust willing to invest in British innovation.

What no one signed up to was poor governance. independent chairman Susan Searle has been disappointing. And the City regulator, the Financial Conduct Authority, also claims it has no direct responsibility for the slow meltdown at Patient Capital because it is a quoted company.

this is splitting hairs. Woodford treated Patient Capital as a dump for unlisted shares in his closed and liquidated equity income fund. Searle is over-boarded with an independent role at quoted security group Qinetiq as well as directorships of two AiM-listed companies.

She stepped down as chair of Mercia technologies in July, after the Woodford crisis flared up. Searle had little choice in that Mercia owned 0.5pc of Patient shares, another potential conflict of interest.

Since the Woodford affair blew up in June the independence of the Patient Capital board has been bolstered.

But there is no escaping the fact that Searle and her fellow directors showed poor judgement by allowing Woodford, as fund manager, to buy stakes in firms in which they were involved.

Soon after the suspension of equity income the board of Patient Capital let it be known that they were looking to replace Woodford as manager. But nothing happened and the shares’ nosedive continued.

Following Woodford’s ousting from equity income a week ago, the situation at Patient Capital looks ever more dire and still there is prevarication about a new manager. taking on Patient Capital is a poisoned chalice and potential managers have steered clear.

Blackrock might look the obvious choice as it is in charge of liquidating equity income. Other private equity firms, including Pantheon international and Bostonbased harbour vest, also are mentioned.

For the sake of the reputation of the sector, Searle must go if confidence is to be restored. regulators must also explore the role of Chicago-based northern trust which is both custodian – the official holder of the underlying shares – and Patient Capital’s biggest lender with a £150m loan facility.

When it published its 2019 third-quarter results on tuesday, northern trust claimed a ‘marked improvement’ in credit quality and a ‘decent show’ during the September quarter. there is nothing decent about its relationship with Woodford and the way it allowed its lending to Patient Capital to touch legal limits.

Fallen heroes

there is a tendency in business to dance on the graves of former idols.

it is hard to feel any sympathy for We Work founder Adam neumann as the office-sharing pioneer heads into the sunset clutching a cheque for an astonishing £1.3bn.

But a chunk of this was payment for his shareholding and at worst he has created an £8bn enterprise which captures the zeitgeist for tech and millennial workers.

in a different part of the forest, vernon hill is waving goodbye to fans of Metro Bank far sooner than he hoped. in an era of low interest rates and tough post- crisis banking regulation, hill’s model of superior service banking was always going to struggle.

By putting the consumer first he was differentiating his bank from players such as Barclays, which has been criticised for severing ties with Post Office banking.

if there is comfort to be drawn, it is that old entrepreneurs never die. it took the return of Michael Dell to the helm of Dell computers to bring it back from the precipice. the return of Steven Jobs saw Apple turned around. And, closer to home, veteran advertising executive Sir Martin Sorrell is creating a post-WPP future.

entrepreneurship is still to be valued.

See no evil

nOthing could be more embarrassing than watching the former thomas Cook chief executives Manny Fontenla-novoa and harriet green trying to slough off responsibility for the fall of the most famous name in travel before the Commons.

A bit of humility from the C-suite wouldn’t go amiss.