Trouble at the top

boxing_gloves_on_man_410After months of stock market stalking, Edward Bramson, founder of Sherborne Investors, successfully took over as chairman of London-listed F&C Asset Management and investors are now waiting with bated breathe to see whether he will help realise latent potential he has claimed is embedded within the firm.

At the F&C general meeting, held last Thursday, former directors Nick MacAndrew, who was chairman, and Brian Larcombe were voted off the board with 65% and 61% of votes respectively. Bramson was appointed with 70% of votes.

The coup had been long coming. The US activist investor was pretty vocal about wanting to oust MacAndrew and Larcombe. To do so Sherborne Investor had built up its number of voting shares in F&C to over 17% in December last year. This gave Sherborne full voting power at the F&C general meeting.

Sherborne’s challenge to F&C was given further support when Aviva Investors, which owns a 9% stake in F&C, threw its weight behind it.

Ahead of the general meeting, F&C published a number of questions, probing Bramson’s ability to adequately lead the firm. One such question was about whether he’d be able to juggle all his responsibilities effectively. Bramson, in addition to his role at Sherborne, is executive chairman of Nautilus, a US-based manufacturer of gym equipment, in which Sherborne acquired a 20% stake.

In this letter, F&C couldn’t help pointing out that Nautilus’s share price fell 75% since the Sherborne acquisition.

Bramson had more success at 4imprint, Elementis and Spirent, where his cost-cutting exercises led to a surge in their share prices.

But despite F&C’s misgivings, the deed is done and Bramson was voted into his role with a significant majority.

Unsurprisingly, F&C has not been shouting the news of its new chairman from the rooftops. The firm released a stock exchange announcement and published the results on its website, but did not send this out to its media contacts.

“There’s nothing much to say about it, really,” said a spokesperson at the firm.

Now all the firm, and its various parts, which include Thames River Capital, can do is wait and see whether Bramson delivers on his promises or makes a bad situation worse.

©2011 funds europe