Barclays: Bramson’s Sherborne defeat does not mean banks are safe from activists
Other funds have shown how shareholder activism can work in financial stocks, especially in Europe.
Sherborne Investors’ sale of its 6% stake in Barclays has been a long time coming. Indeed, Edward Bramson’s presence as a shareholder ceased being a concern for the bank’s management and board some time ago.
But it would be wrong to say that the limited success of Bramson’s campaign to overhaul Barclays is proof that banks are immune from activist campaigns.
In fact, during the three years that Bramson was invested in Barclays, the financial sector – including some banks – has become a more common target for activists in Europe, and for good reason.
Valuations are even lower than in 2018. It is even more urgent for banks to refocus on their strongest businesses.
Bramson, it should be noted, is by no means a mainstream activist. That made it harder to strike fear into Barclays and harder for him to gain credibility among investors and other stakeholders.
Bramson’s thesis was either ill-judged or badly timed
Sherborne Investors, which Bramson manages alongside fellow partner and research director Stephen Welker, is far smaller than other US activists such as Third Point, ValueAct and especially Elliott Management.