Activist investor Sherborne Investors has sold its entire stake in Barclays, ending a three-year battle with the UK lender’s chief executive, Jes Staley, to shrink its investment bank.
The firm, led by Edward Bramson, said in a statement that it was selling its 6.01% stake in Barclays, drawing a line under an acrimonious relationship between the activist and the UK lender’s executive team.
Bramson has consistently called for Barclays to shrink its investment bank since taking a stake in the UK lender in 2018, at one time pushing the bank to shutter its entire markets division, which he called a “black box with too much leverage”.
Instead, he argued, Barclays should focus on its more profitable UK retail business.
However, under Staley, Barclays has continued to expand its investment bank, with the lender saying during its annual general meeting on 5 May that it intended to keep building the unit.
Staley has long argued that Barclays, which inherited a significant US presence with its acquisition of Lehman Brothers in 2008, should be a European force in investment banking in a sector dominated by Wall Street banks.
Bramson’s position has appeared increasingly untenable as Barclays’ investment bank performance has surged, supporting profits throughout the Covid-19 pandemic as other units foundered.
In the first quarter of 2021, profits at Barclays’ investment bank were up by 54% to £1.3bn as trading and advisory revenues increased.
“Barclays employs many good and capable people, and is still an important institution in the United Kingdom,” said Bramson in a letter to its investors on 7 May. “Business is not a science and so people of goodwill may, therefore, sometimes differ. In that spirit, Sherborne Investors expresses its most sincere wish that things will turn out well for Barclays, its employees, and its investors.”
In an August letter to shareholders, Bramson argued that Barclays should follow the lead of rival Deutsche Bank by radically paring back its sales and trading business. The German lender has seen performance turn around, following a radical shake-up that saw it exit equities sales and trading and cut 18,000 jobs. The proposal by Sherborne was widely contested by other Barclays shareholders.
“There is a great opportunity for Barclays to create significant shareholder value by adopting a strategy that investors believe in, as they clearly do not believe in the current one,” Bramson wrote in August.
Bramson has also pushed for Staley to go, latterly saying his links with convicted paedophile Jeffrey Epstein should lead to his resignation. The activist also tried to gain a seat on Barclays’ board in 2019.
In his letter investors, Bramson said it was “a pity that the opportunity did not arise to join the board of Barclays to assist in a turnaround with a similar result” to his investments in other firms.
In a rare public appearance, Bramson told a huddle of journalists at Barclays’ 2019 annual general meeting that he was conceding defeat for his quest for a board seat, and would give incoming chair Nigel Higgins time to make his mark on the company. His calls for change at the UK lender have been less prevalent since.
To contact the author of this story with feedback or news, email Paul Clarke