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Activist investor Edward Bramson has admitted defeat in his three-year campaign to oust Barclays chief executive Jes Staley and force the lender to downsize its investment bank.
Sherborne Investors, the fund managed by Bramson, said Friday it had sold its entire 6% stake in Barclays at an average price of 186 p., More than 73 p. first purchased during March 2018. For most of that period, Sherborne was Barclays ’largest shareholder.
“It is possible that the turnover of the sector that has raised Barclays and most of the banking stocks will have to go even further, although it is being done quite late in the investment banking cycle,” Sherborne said in a communiqué.
“We believe the new investment will produce better returns and have a clearer perspective that we are participating in an operational change,” he added, without identifying the target.
Bramson’s opposition to Barclays’ strategy focused on its investment bank, which Staley refused to withdraw despite years of lower returns compared to the group’s retail and credit card units. .
However, during the coronavirus pandemic the revenues of the bank’s trading and trading division increased amid turbulent markets and high debt demand. At the same time, retail revenues fell amid large loan provisions and a slowdown in consumer spending.
Staley argued that the developments vindicated his thesis that an investment bank was a good counterweight to retail lending during a crisis.
Sherborne also argued that Staley was not a fit person to run a major lender because of his historical relationship with the unfortunate financial financier Jeffrey Epstein, who was Staley’s client when he was at JPMorgan Chase. Bramson called the situation around the chief executive “A destabilizer. . . circus “.
President Nigel Higgins continued to support Staley, but has begun searching for his predecessor, the Financial Times reported.
When the pandemic broke out, Bramson briefly stopped his campaign, only to do so. restart again last August. He was heavily defeated in his attempt to secure a seat on the board in 2019 and did not get much support for his views from other shareholders.
The secret fund is based on Guernsey and Bramson rarely does interviews, preferring to communicate by letters to its investors.
“Business is not a science and therefore people of good will can therefore sometimes defer,” the fund’s statement adds. “In that spirit, Sherborne Investors expresses its most sincere wish that things go well for Barclays, its employees and its investors.”
Barclays declined to comment.
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