John Stewart: Wellcome Trust

Adding to a number of firsts the Wellcome Trust is now leading the way with the first charity bond issue. Lorraine Cushnie reports

The Wellcome Trust is used to breaking records. As the UK’s largest charity, it has often blazed a trail. This year the Wellcome Trust added another first to its name when it became the first charity to access the capital markets through a £500m bond issue.

For John Stewart, head of legal and company secretary, the bond threw up a lot of challenging legal issues. “What made it interesting was the combination of it being the first time we issued a bond, as well as being the first UK charity to issue a bond,” says Stewart.

One of the most important tasks Stewart had to complete was to get a ‘blessing’ or Section 26 order from the Charity Commission, which gave investors an assurance that the trust was in a position to pay back the bond.

“It wasn’t clear that a charity could borrow money for investment purposes. By going to the Charity Commission it removed any doubt about what we could borrow,” explains Stewart. “The people at the Charity Commission were brilliant; they’ve been extremely helpful.”

When it came to choosing a law firm to advise on the bond issue, there was only ever one up for consideration – its principal outside legal counsel CMS Cameron McKenna. The firm helped draft Sir Wellcome’s will, which made provision for the establishment of the trust in 1936.

“As well as the close relationship we have with Camerons, it can offer the full range of legal services, plus charity law expertise,” says Stewart.

The only other regular outside counsel Stewart instructs is US firm Proskauer Rose for US investment and private equity work. Most of the trust’s legal work is now carried out in-house by the legal team, which has grown from three to seven in the past six years, while external legal spend has shrunk from £900,000 to £300,000 during the same time period.

“Because we know the business of the trust so well, it’s not cost efficient to get outside counsel. The only thing we can’t really do is large complicated investment transactions,” says Stewart.

When Stewart is not putting together landmark bond issues, the rest of his time is spent managing his growing legal team. Below Stewart there are three senior lawyers who have responsibility for different areas of the trust’s work.

Principal solicitor Tara Camm looks after the UK Biobank project, a medical research study of the impact on health of lifestyle, environment and genes in 500,000 people currently aged between 40 and 69 from all around the UK.

The Wellcome Trust is one of the funders and Camm’s work has included setting up a new charity. She also takes care of the legal needs for all the trust’s international work.

Eleanor Boddington heads the medicine, society and history division. Her latest project is to help set up the trust’s new £30m museum, which will house at least 1,500 exhibits and is due to open in summer 2007. “You wouldn’t believe the amount of work involved in borrowing and loaning objects, not to mention the health and safety issues connected with opening a facility for the public,” says Stewart.

Finally, lawyer Chris Bird takes charge of the clinical side of the trust’s work, including the Sanger Institute, its genome research centre.

Outside of work, Stewart is using his extensive knowledge of the charity sector to help other organisations. He is a member of the London committee of charity Human Rights Watch and last year he became a governor of the Contemporary Dance Trust. In order to gain a real understanding of the latter organisation’s work he even signed up for a contemporary dance class.

“I wanted to experience the other side of being a governor with the hope it would make me more empathic. It’s now the highlight of my week,” he says.

Looks like Stewart could soon be blazing a trail on the dancefloor.
John Stewart
Head of legal and company secretary
Wellcome Trust

Organisation Wellcome Trust
Sector Charity
Annual expenditure £483m
Employees 500
Legal capability Seven
External legal spend £300,000
Head of legal and company secretary John Stewart
Reporting to Director Mark Walport
Main law firms CMS Cameron Mckenna, Proskauer Rose
John Stewart’s CV Education: 1981 – awarded Juris Doctor at University of Virginia; 1977 – gained a BA, cum laude, in politics and Russian studies at Princeton University
Work history: 1983 – Joined Shearman & Sterling in New York; 1985 – moved to Shearman in Athens; 1987-89 – spent stints in the London and New York offices of Shearman; 1990-95 – worked at Shearman in London; 1995 – became Wellcome Trust’s first in-house lawyer; 1999 – was made trust company secretary; 2004 – became a formal member of the executive board