Now Barclays predator faces his own backlash: Bramson is set to be grilled by investors after his fund falls 27%
- Sherborne Investors Guernsey C has plunged 27 per cent since 2017
- The fund’s fortunes are directly tied to the share price of Barclays
The corporate raider targeting Barclays faces a fresh humiliation as his own shareholders prepare to grill him over a 27 per cent fall in the value of their investments.
Edward Bramson, who owns 5.5 per cent of Barclays through his Sherborne Investors fund, suffered a hefty defeat last week in his bid to win a seat on the bank’s board.
He won support from just 3.9 per cent of Barclays shareholders, leaving him a long way short of the 50 per cent he needed, so he was unable to force Barclays to curtail its investment banking arm.
Corporate raider: Edward Bramson owns 5.5 per cent of Barclays through Sherborne Investors
Now the New York financier is braced for a backlash from his own shareholders – many of whom did not back his bid for a board seat – at Sherborne’s annual meeting on June 4.
The value of Bramson’s fund, Sherborne Investors Guernsey C, has plunged 27 per cent since 2017, from £695.9million to £502.3million. In that time, the FTSE 100 has fallen 3.3 per cent.
The fund’s fortunes are directly tied to the share price of Barclays.
The fall in the fund’s value has affected major institutions including Aviva, Schroders, Fidelity and Columbia Threadneedle – all of which own shares in Sherborne.
City commentator David Buik, of trading firm Core Spreads, said: ‘It’s all very well having a good track record, but when you slip up people are not loyal and they tend to leave these funds.
‘I suspect Bramson’s going to plead with his shareholders to give him time.’
At the meeting of Barclays’ investors, Bramson vowed to fight on in his bid to boost the bank’s ailing share price, which has fallen 20 per cent over the year, compared to a 2 per cent fall for the FTSE 100.
He said investors wanted to give the bank’s incoming chairman Nigel Higgins a chance to fix problems before putting an activist on the board.
‘If Higgins wants to take a shot at it himself, that’s fine with us,’ Bramson said. ‘The only thing we’d say is having been given a chance to do that, we’re expecting to see results.’
Bramson was not the only item on the agenda for Barclays’ shareholders. Many had expressed dismay at the high level of pay for its bankers and ongoing litigation issues.
Bramson’s fund’s fortunes are directly tied to the share price of Barclays
One shareholder said at the meeting: ‘The reports of misbehaviour or excess are many and diverse.
‘And by excess, I mean wild overpayments of the staff and the board. Your annual report shows executive directors were paid about £7million. There’s another £3.5million for non-executive directors.
‘I put it to you that shareholders are not getting value for money, and the bank is repeatedly promising improvements in the future which are, to say the least, very slow in coming.’
Responding to shareholder concerns at last week’s meeting, outgoing chairman John McFarlane said: ‘Many of these go back a long time. PPI goes back a long time. Some of the larger litigation and conduct issues started in 2010 and it’s taken some time for these to come through the system.
‘I can assure you we’re not trying to deliberately create these any more. These are mistakes that do get made, and hopefully that we can draw a line under.’
Sherborne declined to comment.