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Wednesday 18 July 2018

Activist investor takes stake in Barclays

Edward Bramson’s company, Sherborne, bills itself as a ‘turnaround investment firm’.

Barclays lending fund
Barclays lending fund

By Ravender Sembhy, Press Association City Editor

Activist investor Sherborne has become the fourth-largest shareholder in Barclays, raising the prospect of pressure being put on the bank’s board.

Sherborne, run by Edward Bramson, has picked up a 5.16% stake in the lender for £580 million and now sits behind Capital Group, Qatar Investment Authority and BlackRock on shareholder register.

Mr Bramson’s company bills itself as a “turnaround investment firm” and has a stated goal of doubling the share price of companies it invests in.

It is understood that Mr Bramson, who has a track record of corporate activism, has met Barclays representatives, although he is yet to lay down any specific demands.

The most high-profile shake-up was engineered at Electra Private Equity, when Mr Bramon strong-armed himself on to the board and became interim chief executive.

At Electra, he cut costs and oversaw an asset divestment programme.

Barclays said in a brief statement: “As with all its shareholders, Barclays will continue to engage with Sherborne, and welcomes them as a shareholder.”

Shares in the lender rose to the top of the FTSE 100, gaining 3.7% to 217.6p in morning trading.

Russ Mould, investment director at AJ Bell, said: “Banking group Barclays has topped the FTSE 100 leader board this morning on news activist investor Sherborne has taken a 5%-plus stake in the business.

“The vehicle, backed by the respected Edward Bramson, has previously helped turn around several smaller businesses.

“It will be interesting to see how this situation plays out given Barclays is arguably impacted by issues over which it has limited control, including an ongoing fraud investigation linked to a Qatari funding deal in 2008.”

The Sherborne announcement comes just weeks after Barclays swung to an annual loss of nearly £2 billion after a string of hefty charges, including US President Donald Trump’s corporate tax changes and a hit from the collapse of Carillion.

Pre-tax profits rose 10% to £5.3 billion for 2017, but it reported an after-tax loss of £1.9 billion against profits of £1.6 billion in 2016.

It was pushed into the red by £2.5 billion in previously-announced losses from the sale of Barclays Africa Group and a £901 million charge from the US president’s January 1 corporate tax changes, as well as a £127 million blow in the fourth quarter from failed outsourcing giant Carillion.

Press Association

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