When Edward Bramson, the activist investor, staged an attack on an underperforming British chemicals group in 2005, the company’s chairman felt he had little choice but to resign.
“Shareholders were telling me they wanted Ed on the board, but I was uneasy about an activist joining,” recalls Keith Hopkins, who led Elementis at the time. “I felt he was bound to have a conflict of interest at some point.”
Mr Hopkins was replaced by Mr Bramson, who installed himself as executive chairman and ousted the company’s management. But it was not the last he would hear from the man who cost him his job. “He subsequently wrote a very kind letter to me to thank me for dealing with it all in a way that minimised the disruption, and even asked if I wanted to be a non-exec at some of his other ventures,” says Mr Hopkins, currently head of the governing body of the University of Hull.
Now Mr Bramson has a much larger target in his sights. He has built a 5.5 per cent stake in Barclays — making him the British lender’s third-largest shareholder — and next week he will try to force his way on to the board at the company’s annual meeting. He hopes to instigate a shift in strategy that would involve shrinking its trading unit; if successful, his campaign could herald the demise of Britain’s last remaining global investment bank.
Born and raised in the UK in 1951, Mr Bramson emigrated to New York in his early 20s and started working on Wall Street. By 1987, he had set up his own private equity firm. His holdings included a big supplier of blue dye to the jeans industry and an ill-fated, money-losing investment in Ampex, a pioneer of video recording technology.
Still based in New York, Mr Bramson has spent about 15 years waging a series of mostly successful attacks on a hotchpotch of underperforming UK businesses, including a promotional merchandise company and the asset managers F&C and Electra.
The scale of the challenge facing Mr Bramson at Barclays is greater than anything he has faced before, but his polite, solicitous style is just as unorthodox as it was when he started out. While US activists such as Carl Icahn and Bill Ackman use the media to wage high-profile wars against their targets, his campaign against the bank has taken place almost entirely behind closed doors.
Mr Bramson cuts an unusual figure not only among corporate raiders, as activists are pejoratively known, but in the 21st century itself. His suits feature high-waisted trousers from another era and he speaks with a patrician transatlantic accent that gives the impression he has just stepped off the set of a 1940s film.
“He is very quietly spoken, so it’s often difficult to hear what he says, but he’s always very polite — and never overly aggressive,” says Mr Hopkins, who now credits Mr Bramson with an impressive turnround at Elementis.
Imbued with a dry sense of humour, Mr Bramson peppers his opinions on Barclays’ problems with colloquial observations. In a recent meeting he interrupted his analysis of the bank’s performance to highlight its low market valuation: “The dog is not buying the dog food; the stock price stinks!”
Mr Bramson’s mannerisms and his wan, drawn appearance unnerve some people. “He is clearly not a man who spends much time in the sun; slightly pale and cadaverous,” says a Barclays investor whom he recently met.
Few large shareholders think Mr Bramson has run an especially convincing campaign on Barclays. Although many share his distrust of the investment bank, they are not convinced by his strategy for scaling it back.
Indeed, many fear that a botched attempt to shrink the unit could undermine Barclays’ overall stability. Rival lenders that took similar paths, such as Royal Bank of Scotland and Deutsche Bank, have scars to show for it.
“We think there is no pain-free way of reducing the size of an investment bank,” says Richard Buxton of Merian Global Investors, a long-term Barclays shareholder. “The revenues disappear on day one, but the costs do not.”
Others complain that Mr Bramson’s plans lack detail and that his vehicle, Sherborne Investors, is a shoestring operation. Mr Ackman employs nearly 40 people to develop detailed takedowns of the companies he attacks; Mr Bramson relies on two close associates.
It is unsurprising, then, that few shareholders expect Mr Bramson to be elected as a director next week. Even his most ardent supporters concede this will be a more protracted fight.
But Mr Bramson has not needed a board seat to make his presence felt. Barclays has recently taken drastic steps to improve profitability at its investment bank. It ousted the executive who led the unit, Tim Throsby — a profane Australian fond of wearing cowboy boots who might easily serve as Mr Bramson’s opposite. The bank is also revamping its board and cracking down on costs, in part by cutting bonuses for its dealmakers and traders.
One unanswered question is why Mr Bramson, now 68, is embarking on such an epic battle. Some sense unfinished business with Britain’s establishment, not least the clubby City of London.
“Whether he has bitten off more than he can chew with Barclays remains to be seen,” says Mr Hopkins. “But despite quite a pleasant exterior, one should not underestimate how tenacious and determined he is.”
The writer is the FT’s banking editor
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