Rebel shareholders oust the chairman at F&C

A controversial bid by activist US investor Edward Bramson to seize the chairmanship of one of Britain's biggest fund managers succeeded in the teeth of fierce opposition from the company's board yesterday.

Mr Bramson's bid for the chairmanship of F&C Asset Management was backed by 70 per cent of shareholders who voted at an EGM yesterday. Turnout was 80 per cent. Mr Bramson also narrowly succeeded in getting Ian Brindle elected, with 54 per cent support. Derham O'Neill, his third nominee was elected with 70 per cent backing. By contrast, 65 per cent opted to oust existing chairman Nick MacAndrew with 60 per cent voting to unseat his colleague Brian Larcombe.

Mr Bramson's Sherborne Investors is F&C's biggest shareholder with 18 per cent. He has received the backing of insurer Aviva whose fund management arm holds 8.6 per cent. ISS, a US-based investor consultancy influential among American shareholders, also backed Mr Bramson. However Glass Lewis, another governance advisor, and Pirc, the UK-based consultancy, backed the board as did Eureko, F&C's second biggest shareholder and one of its biggest clients. That could spell problems for the company if Eureko opts to review its mandates in the wake Mr Bramson's election.

The latter has criticised F&C's recent acquisitions and what he has claimed is the poor performance of its shares. He has not, however, clearly spelt out what he would do to turn things around. Mr Bramson has never before taken on a fund manager.

All three new directors will have to be approved by the Financial Services Authority before taking their seats on the board, meaning that they will have to undergo the watchdog's new "intrusive" process. F&C has previously questioned the fund management experience of the new men. F&C manages £108bn of investors' money. Chief executive Alain Grisay is expected to remain in his post for now.