Barclays Activist Investor Edward Bramson Sells Entire Stake -- 2nd Update
By Simon Clark
LONDON -- Edward Bramson's Sherborne Investors said it sold its
entire stake in Barclays PLC, giving up on a yearslong activist
campaign to restructure the bank the British bank with a major Wall
Sherborne, which seeks to influence the strategy of companies it
owns shares in, was one of the bank's biggest shareholders with a
6% stake, worth around $2.5 billion.
Mr. Bramson unsuccessfully attempted to join the board of
Barclays and petitioned its chief executive, American banker Jes
Staley, to scale back investment-banking operations in favor of
investing more in its U.K. retail bank.
Sherborne struggled to turn a profit on Barclays. Since it
disclosed its stake in March 2018, Barclays shares, including
dividends, returned a loss of around 8%, according to FactSet. The
S&P 500 over that time has given investors a total return of
more than 60%. Barclays shares rose 2% Friday.
"It is a pity that the opportunity did not arise to join the
board of Barclays to assist in a turnaround," Sherborne said in a
A Barclays spokesperson declined to comment.
Other investors have also found it difficult to capitalize on
the troubles of Europe's deeply discounted banks. New York-based
private-equity firm Cerberus Capital Management LP acquired large
stakes in Germany's Deutsche Bank AG and Commerzbank AG in recent
years and pushed for changes, while the share prices of both banks
Mr. Bramson's retreat is a vindication for Mr. Staley, who
opposed Mr. Bramson's vision for a smaller, less risk-taking
Barclays that would focus more on its bread-and-butter U.K. lending
business. He kept a large investment-banking operation, which
proved to be a strong source of profits during the pandemic.
"The war is over," Investec Securities analyst Ian Gordon wrote
in a note. "Barclays' management had de facto already 'won the
argument' with Sherborne regarding the future business mix of the
The conflict between Mr. Bramson and Mr. Staley was tense at
times. Early on, Mr. Staley told colleagues: "He wants us to
retreat into a foxhole? He should go back to Connecticut,"
referring to the state where Mr. Bramson had a home.
Mr. Bramson also criticized Mr. Staley for his professional
relationship with late financier and convicted sex offender Jeffrey
In March 2020, Sherborne called on Barclays to withdraw its
support for Mr. Staley and said it would vote against his
re-election at the bank's annual meeting. A month later, Sherborne
said that "with great reluctance" it would only withhold its vote
on Mr. Staley's re-election because of the challenges the bank
faced during the coronavirus pandemic.
"We continue to believe that Mr. Staley has not demonstrated the
level of judgment befitting a director or senior executive of the
company," Sherborne said in April 2020.
The U.K.'s Financial Conduct Authority and Prudential Regulation
Authority have been examining Mr. Staley's characterization to
Barclays of his relationship with Mr. Epstein and the bank's
subsequent description of the relationship to regulators.
Mr. Staley previously led JPMorgan Chase & Co.'s private
bank, where he met Mr. Epstein, who was a client. Last year, he
said he regretted having had any relationship with Mr. Epstein.
Sherborne struck a more conciliatory note as it sold its shares
"Business is not a science and so people of goodwill may,
therefore, sometimes differ," Sherborne said Friday.
Sherborne said it had begun building a position in another
"We think that the new investment will produce better returns
and has a clearer prospect of our becoming engaged in an operating
turnaround, which is the primary contributor to Sherborne
Investors' investment returns," the company said in a
Write to Simon Clark at firstname.lastname@example.org
(END) Dow Jones Newswires
May 07, 2021 07:47 ET (11:47 GMT)
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