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Activist Edward Bramson ends Barclays battle by selling stake

Mark Sweney
·2-min read

The activist investor Edward Bramson has sold his 6% stake in Barclays, abandoning a three-year battle to overhaul the British bank.

Sherborne Investors, Bramson’s New York-based investment vehicle, said it was selling the stake to focus on a new unnamed investment target instead.

The British-born lawyer first took a stake in Barclays in 2018, criticising Barclays’ underperforming investment bank and saying its strategy had failed to benefit shareholders.

“Sherborne Investors has informed the company that it believes that the risk of and rewards from a new investment opportunity that it has identified offers a better return to the company’s shareholders than a continuing investment in Barclays,” it said.

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The scale of his stake made him the third-largest shareholder in Barclays, after the investment fund BlackRock and Qatar’s sovereign wealth fund, but his plans failed to gain much traction with other investors. In 2019, fewer than 13% of shareholders voted in favour of a resolution to have Bramson appointed to the board of Barclays.

Sherborne first declared its stake in Barclays in March 2018, since when the share price has fallen, and is currently 15% lower than when the fund’s position became public.

Barclays had been under pressure to bolster profits after the chief executive Jes Staley’s push into investment banking initially failed to significantly boost profits.

Barclays reported a 30% fall in pre-tax profits last year, from £4.4bn a year earlier, with earnings hit by a jump in bad debt provisions. However, the bank highlighted the strong performance of its investment bank, which benefited from a jump in trading because of market volatility last year, and corporate fundraising. The division reported a 35% increase in pre-tax profits to £4bn for the whole of 2020, providing a boost to Staley’s strategy to diversify the bank’s returns.

Shares in Barclays rose 2% on Friday morning after Bramson’s announcement, making the bank one of the top FTSE 100 risers.

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