Activist investor Edward Bramson ends battle for Barclays by selling his stake

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Activist investor Edward Bramson sold his 6% stake in Barclays, abandoning a three-year battle to overhaul the UK bank.

Sherborne Investors, Bramson’s New York-based investment vehicle, said it was selling the stake to focus on an unnamed new investment goal. The move offers some relief to Barclays after a long row with the investor over the lender’s business model and leadership.

The British-born lawyer first took a stake in Barclays in 2018, urging the lender to downsize its underperforming investment bank to focus on its more lucrative consumer operations, saying its strategy does not had not benefited shareholders.

However, Bramson, who has been described as a corporate raider by critics and a turnaround specialist by fans, struggled to gain traction with other Barclays shareholders, who balked at his efforts to spawn. a path to the bank’s board of directors in 2019, when there were fewer. over 13% of shareholders voted in favor.

He took another bank leadership race in early 2020, calling for the removal of chief executive Jes Staley after it emerged the bank boss was facing a regulatory probe into his ties to disgraced sex and financial offender Jeffrey Epstein. However, Bramson relaxed demands for Staley’s removal last spring in light of the Covid-19 outbreak.

In a letter to investors on Friday, Sherborne said he was taking advantage of the rise in Barclays’ share price to break out of his position, after seeing the stock climb over 180p from 73p a year earlier. However, the share price is currently 15% lower than when the fund’s position went public.

Sherborne told investors he had joined the boards of five other companies since taking a stake in Barclays, and had launched “successful turnarounds in all of them.” He said: “Each of these investments has returned 100% or more, so it is a shame that the opportunity has not presented itself to join the Barclays board of directors to help with a turnaround with a similar result.

“We believe the new investment will produce better returns and have a clearer prospect of engaging in an operational turnaround, which is the main contributor to Sherborne Investors’ return on investment.”

Barclays shares rose 3% on Friday after Bramson’s announcement, making the bank one of the top risers on the FTSE 100.

Bramson’s scale of stake prior to the sale made him Barclays’ third-largest shareholder, after investment fund BlackRock and Qatar’s sovereign wealth fund.

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Barclays had been under pressure to increase profits after Staley’s push into investment banking initially failed to significantly boost profits.

Barclays announced a 30% drop in pre-tax profits in 2020, down from £ 4.4bn a year earlier as profits were affected by higher provisions for bad debts. However, the bank highlighted the good performance of its investment bank, which benefited from a surge in trade due to market volatility last year, and corporate fundraising.

The division announced a 35% increase in its pre-tax profits to £ 4 billion for the whole of 2020, which gave a boost to Staley’s strategy to diversify the bank’s returns.

In her letter, Sherborne offered a few words of departure to the bank, which she said employed “a lot of competent and knowledgeable people, and which is still an important institution in the UK”.

He said, “Business is not a science and therefore people of good will can sometimes differ. With this in mind, Sherborne Investors expresses its sincere wish that things turn out well for Barclays, its employees and its investors. ”

Barclays declined to comment.


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