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January 3, 2013 10:38 pm
Edward Bramson, the activist investor who is executive chairman of F&C Asset Management, is preparing to take on another midsized UK public company.
He has launched a second Guernsey vehicle, backed by Soros Fund Management, that will sit alongside Sherborne Investors Guernsey A, the fund through which Mr Bramson controls 22 per cent of F&C.
On January 1, Richard Wilson, F&C’s head of investment and distribution, stepped up to the role of chief executive of the asset manager. Mr Bramson will remain as executive chairman until the spring, when he intends to turn non-executive.
In the meantime, his partners in the new fund, Sherborne Investors Guernsey B, or SigB, which floated on Aim and raised £207m at the end of November, have begun measuring up a potential target.
There is no information about what that might be. All that SigB has said so far is that the target will be publicly quoted, probably in the UK, underperforming and undervalued, and capable of being turned round by Mr Bramson and his team. Most of the £200m raised will be used to buy up to 30 per cent of one target “with the aim of generating a significant capital return”.
The investment partnership has not indicated what kind of returns investors can hope for. Nonetheless, several of Mr Bramson’s previous backers, including Aviva Investors and Threadneedle Asset Management, have invested in the new vehicle, won over by the money they have made from companies that Mr Bramson has turned around.
SigA is credited with generating a profit of 96 per cent over three years from Spirent, the maker of telecoms testing equipment, and 144 per cent over 20 months from Elementis, a chemicals company.
Mr Bramson launched his attack on F&C in 2010, ousting the chairman in February 2011 and the chief executive a few months later, imposing new cost controls and restructuring parts of the business. Some analysts question whether he has fully succeeded in turning round F&C but there is no question that SigA, which began to buy shares in F&C in the summer of 2010 when they were a little over 60p, has made a good return on its investment.
F&C shares closed up just over 1.5 per cent yesterday to 103.1p.
It is not clear when SigA will sell its stake in F&C. The average holding period for Mr Bramson’s three previous investments has been 24 months.
However, he has been adding to the holding in the past few weeks, dispelling expectations of a sale in the immediate future.
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