Activist investor plans shake-up at Barclays after building 5% share

An activist investor has built up a 5% stake in Barclays in an attempt to shake up the bank’s strategy and boost its share price.

Barclays announced on Monday that Ed Bramson’s Sherborne Investors had “acquired voting rights over 5.16% of Barclays’ issued share capital”. The stakebuilding by Sherborne, which describes itself as a “turnaround investment firm”, makes it Barclays’ fourth-biggest investor after US asset managers Capital Group and BlackRock, and Qatar’s sovereign wealth fund.

Bramson, who was born in the UK but moved to New York in 1975, did not comment on his intentions at Barclays but he has often been described as a “corporate raider” who forces change at companies he invests in.

Barclays, whose investment banking division is lagging US rivals, said some of its board members have already met with Bramson and the bank “will continue to engage with Sherborne, and welcomes them as a shareholder”.

Shares in Barclays rose 3.6% to 217p. Barclays, which last month reported a £1.9bn full-year loss, was one of the worst performing banks in the world last year, with shares falling 12%.

Sherborne, a two-man firm run by Bramson and his protégé Stephen Welker, owns 1.94% of Barclays voting rights directly via shares and another 3.2% controlled indirectly via derivative contracts.

The fund raised £700m last summer to fund its next target. The prospectus for the fundraising said Sherborne planned to invest in a “company which it considers to be undervalued as a result of operational deficiencies and which it believes can be rectified by the Investment Manager’s active involvement”.

Unlike high-profile activist investors such as Bill Ackman or Carl Ichan, Bramson prefers to avoid publicity. He has previously targeted well-known British companies including fund manager F&C Asset Management and private equity groups Electra and 3i.

Bramson is due to step down as interim chief executive of Electra, which owns TGI Fridays, later this month after fighting his way on to the firm’s board in 2015. He slashed costs at Electra and encouraged the company to start paying big dividends to shareholders. Sherborne is the private equity firm’s biggest shareholder, with a 30% stake.

In a newspaper interview in 2015, Bramson said the rest of Electra’s board “think we’re scum”. He also went head-to-head against Edward Bonham-Carter, the vice-chairman of investment house Jupiter and older brother of Hollywood star Helena Bonham-Carter. Jupiter was a big investor in Electra and rejected Bramson’s bid for control.

Bramson has said he quit the UK for the US in 1975 after getting trapped in a lift during the power cuts that crippled Britain in the early 1970s. He now operates out of offices on the top floor of a 32-storey tower block in midtown Manhattan with views of the Chrysler building and the East River.

He has rarely spoken about his private life, but divulged in a Bloomberg interview in 2015 that he did go through “a toy phase”. “I did like the houses, all that crap,” he said. Bramson also collects classic cars, and owns several horses.