Shareholder backs F&C

The fund manager F&C Asset Management gained ground in its battle against activist US investors yesterday as its second biggest shareholder, Eureko, publicly backed its board.

The support of Eureko, a Dutch insurer which has operations in eight other European countries, is significant because it is also one of F&C's biggest clients.

F&C is battling against Sherborne, the US investor which has built up a 17 per cent stake and wants to oust its chairman and another director, replacing them with three new directors of its choosing. Eureko has a 9.6 per cent stake in F&C.

Gerard van Olphen, Eureko's chief financial officer, said: "We have every confidence in the board of F&C Asset Management and the strategy it is pursuing. Creating uncertainty around F&C is not in our best interest nor in that of our policyholders. Furthermore, no alternative strategy or business plan has been put forward so far."

The statement came as F&C unveiled plans to outsource part of its back office to cut £12m of costs. An EGM on Sherborne's plans is scheduled for 3 February.