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Aviva says Bramson’s Barclays raid will fail after backing bank

Aviva says Bramson’s Barclays raid will fail after backing bank

David Cumming, equities chief investment officer at Aviva Investors, believes activist investor Ed Bramson will not get a seat on the board of Barclays (BARC) given the change already underway at the bank. 

‘I think it's unlikely he's going to get a board seat because most people rate the new chairman [Nigel Higgins] quite highly and so I think he's really going through the motions now,’ said Cumming. ‘I might be wrong but I would be surprised.’ 

Bramson (pictured) has been battling with Barclays to get a seat on its board since spelling out his plans last month. He wants to to restructure and scale back its investment banking arm but despite recent encouraging results from the bank. 

Barclays yesterday claimed Bramson would be ‘destabilising’ and ‘destructive’ to the bank and urged investors not to back him at its annual general meeting in May. 

Cumming agreed that Bramson’s presence on the board was not necessary and would be ‘value destructive’ in slowing down the plans for change set out by incoming chairman Higgins. 

Higgins' appointment, replacing John McFarlane, was the reason why Aviva last threw its support behind the bank and opposed Bramson's campaign, although it remains an investor in the activist's investment company.

 

According to Refinitiv data, Aviva has a a 14% stake in Sherborne Investors C (SIGC), the Isle of Man fund holding most of the 5% stake Bramson controls in Barclays.

It also holds a 19% stake in Bramson’s Sherborne Investors B (SIGB) which Bramson used to seize control of Electra Private Equity (ELTA), from which it has extracted huge dividends for himself and his backers as he winds down the investment trust.

Aviva is also on Barclays' shareholder register. 

Cumming (pictured) said the fund group's meeting with Higgins, coupled with strong annual results, sparked its intervention.

‘Now Barclays is already effectively restricting the growth of the investment bank but they're doing reasonably well in terms of competition at the moment… I think we're comfortable we've got a chairman coming in who will do the right thing,’ he said.

Cummings said he was due to meet with Bramson next month but was unwavering in his view and said there was nothing the activist investor could say to secure Aviva's backing.

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David Cumming
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