Fund manager F&C Asset Management came under serious attack yesterday as activist investor Sherborne requisitioned an EGM in a bid to fire chairman Nick MacAndrew and replace him with Edward Bramson, Sherborne's founder.
Sherborne, which specialises in turning around what it views to be underperforming companies, has built up a 10 per cent stake in the fund management group and is now the second biggest shareholder after only Eureko, the European life insurance group.
It also wants to oust Brian Larcombe, formerly of 3i who is a non-executive director of F&C, and appoint two other directors, Ian Brindle and Derham O'Neill.
F&C has won high praise for its company engagement, and its corporate governance unit even took the step of voting against the fund manager's own remuneration policy.
However, Sherborne's intervention presents it with a serious challenge: the activist has scored some notable successes when it has targeted companies, notably succeeding in taking control of UK telecoms company Spirent in 2006 after successfully ousting the chairman and two of the company's non-executive directors in a boardroom coup.
Sherborne likes to work by building up substantial minority stakes in companies before launching strikes against their boards. It has not ruled out buying further F&C shares but won't go beyond the 29 per cent level above which it would have to bid.
F&C announced the EGM request at 5.22pm yesterday, nearly an hour after the close of trading. Mr MacAndrew also issued a strongly worded statement saying: "F&C continues to make good progress in executing its stated strategy of improving investment performance, generating new business flows, diversifying into higher margin asset classes and effective cost management.
"We are therefore disappointed that Sherborne has taken this course of action which jeopardises this progress. In our discussions with them, Sherborne has failed to propose an alternative to the existing strategy for F&C."
F&C further highlighted what it called the "lack of experience" of Sherborne's nominees given its status as a business regulated by the Financial Services Authority.Reuse content