An activist investment fund just became one of Barclays’ biggest shareholders — and it could signal big changes

Barclays CEO Jes Staley.

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Barclays CEO Jes Staley.
source
Reuters

  • Sherborne, an investment vehicle headed up by renowned activist investor Edward Bramson, has acquired a stake of more than 5% in Barclays.
  • Sherborne is now Barclays’ fourth-largest shareholder.
  • Only Capital Group, the Qatar Investment Authority, and BlackRock have larger stakes.
  • The investment comes just a few weeks after Barclays revealed a lacklustre set of annual results for the 2017 financial year.

LONDON – Sherborne, an investment vehicle headed up by renowned activist investor Edward Bramson, has acquired a stake of more than 5% in Barclays, becoming one of the British banking giant’s biggest shareholders.

Barclays said on Monday that entities controlled by Sherborne now control the voting rights over 5.16% of the bank’s issued share capital, making it the fourth biggest shareholder. Only investment manager Capital Group, the Qatar Investment Authority and BlackRock have larger stakes.

Bramson is well known for his corporate turnarounds – including private equity group Electra, telecoms business Spirent Communications, chemicals firm Elementis, and fund manager F&C Asset Management.

He is believed to have met with Barclays’ board, but as yet, has not made any specific demands. Activist investors frequently demand concessions from the companies they invest in, such as changes in strategy, or seats on the company’s board.

While Bramson and Sherborne have not yet made any formal demands, the taking of a more than 5% stake in Barclays is a clear indication that it plans to do so, given the firm’s history.

Sherborne’s investment comes just a few weeks after Barclays revealed a lacklustre set of annual results for the 2017 financial year.

Barclays made a net loss of £1.9 billion last year as continuing PPI payments and the impact of the USA’s new tax rules hit the bank’s bottom line.

Barclays took a £2.5 billion hit from the sale of its African business and suffered a “one-off net tax charge of £901 million” due to Donald Trump’s new US tax plan.

“2017 was a year of considerable strategic progress for Barclays,” Barclays’ CEO Jes Staley said in a statement released with the results.

Alongside less than perfect performance, CEO Staley is also awaiting the results of an investigation of into his attempts to unmask a whistleblower at the bank in 2016.

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