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Woodford’s Conflict of Interests exposed with Wales fund

Neil Woodford was last night facing fresh questions about conflicts of interest around his controversial small shareholdings.

The Mail on Sunday can reveal that a fund linked to the fallen investment star collected millions in fees while piling taxpayer money into a string of firms in which Woodford is an investor.

Woodford, who has shuttered his Equity Income Fund, is the main shareholder in Arix Bioscience, whose fund management arm runs the Wales Life Sciences Investment Fund. That fund was created in 2013 by the Welsh Government, which put up taxpayer cash to attract biotech businesses to Wales.

Now it can be revealed that much of the money from the £100million fund went into biotech firms connected to Woodford. Of the nine investments made, six are connected to Woodford. The Wales fund and Woodford Investment Management are both invested in ReNeuron, Proton Partners, Sphere Medical and Switzerland-based CeQur.

Woodford is linked to two others backed by the Wales fund. Medaphor, now called Intelligent Ultrasound, is backed by IP Group, and Verona Pharma counts Arix as a backer. Woodford has a 14 per cent stake in IP Group and a 24 per cent stake in Arix.

The City's Takeover Panel classes Woodford and the Wales Life Sciences Investment Fund as a 'concert party' because of their close ties through Arix, meaning it assumes they are acting together.

The revelations are likely to heap more scrutiny on Woodford amid suggestions of cosy ties with his business associates, detailed by the MoS a week ago. Woodford's connections with the Wales fund can be traced back to 2016 when he pumped money into Arix.

This firm had recently bought Arthurian Life Sciences, which managed the Wales fund's investments. Arthurian was run by Welsh biotech entrepreneur Sir Chris Evans – an ally of Woodford.

Fees pocketed by Arthurian – and later Arix – for managing the Welsh government fund for the past six years total nearly £11million.

In 2016, the Wales Audit Office highlighted conflicts of interest between Arthurian and the Wales fund. ReNeuron had been given a £7.8million grant by the fund – even though Sir Chris had a stake and was a director of ReNeuron.

Woodford was an investor in ReNeuron through Invesco, where he worked before setting up his own firm in 2013. He later invested again through Woodford Investment Management.

The Wales Audit Office report criticised the Welsh Government's handling of the fund and 'significant shortcomings' in deciding Arthurian should run the fund and managing conflicts of interest – even though Sir Chris had declared these. Welsh Conservative Shadow Business Minister Russell George said the relationship between the Wales fund and business owners needed to be 'transparent and clear for all to see'.

Woodford and Arix declined to comment.

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https://www.thisismoney.co.uk/money/investing/article-7170557/amp/Exposed-Woodford-faces-questions-conflicts-link-100m-Wales-fund.html

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