Edward Bramson’s activist investment fund has acquired an interest in Barclays that gives it voting rights over 5 per cent of the British bank, increasing pressure for it to turn round its faltering performance.
Barclays said in a statement on Monday that entities controlled by Sherborne, Mr Bramson’s investment vehicle, had acquired voting rights over 5.16 per cent its issued share capital.
Sherborne said it had invested £580m (€660m) in Barclays shares and derivatives. It owned 1.94 per cent of Barclays voting rights though directly held shares and 3.21 per cent through derivatives.
Shares in Barclays rose 3 per cent on the news.
Mr Bramson, who was born in London but moved to New York more than 30 years ago, is understood to have met with members of the Barclays board to discuss the bank’s annual results and to hear its outlook for the coming year.
Barclays said he had not made any specific demands, such as to gain a seat on the bank’s board or to change its strategy.
Mr Bramson has led several high profile corporate turnrounds in the last few years, including F&C Asset Management, the fund manager, and Electra, the private equity group.
Sherborne’s investment in Barclays is the second time in a few months that a hedge fund has made a large bet on the bank’s shares after Tiger Global in the US invested about $1bn in its shares last year.
Barclays, which reported a full-year loss of £1.9 billion last month, was one of the worst performing shares in its sector in 2017, falling more than 12 per cent while the Stoxx Europe 600 Banks index rose 7.5 per cent.
But its shares have rallied recently, after the bank announced plans to restore its dividend back to where it was before being cut two years ago and said it would benefit from US tax cuts and a revival of volatility in financial markets since the start of this year.
Jes Staley, chief executive, has made a big bet that he can turn round the performance of Barclays’ investment bank, which has been hit by a long period of low volatility in financial markets and changes to regulation on bank capital requirements.
However, Mr Staley is under investigation by UK and US regulators into his attempts to unmask a whistleblower, raising doubts over his job.
The bank also faces a potentially heavy fine in the US for mis-selling mortgage securities and a criminal investigation in the UK for its 2008 fundraising in Qatar.
– Financial Times