Activism Across The Atlantic: Sherborne Scoops 10% Of PE Firm Electra

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Edward Bramson’s Sherborne Investors has accumulated a 10.24% stake in Electra Private Equity Plc (LON:ELTA) which is an investment trust listed on the London Stock Exchange and focused on private equity investments.

The stake is through Sherborne’s Guernsey vehicle and is made up of 1,897,266 ordinary shares and 1,721,848 non-voting total return swaps.

Sherborne’s investment thesis

Its motives for investing in Electra Private Equity Plc(LON:ELTA), passive or active, are not yet clear.

Sherborne Investors, which describes itself as a “turnaround investment firm” on its website, has a reputation for activist investing.

“Sherborne Investors concentrates its turnaround investing activities as a minority shareholder in publicly quoted companies. We seek to enhance value in our portfolio companies by offering our participation on the board, rather than through majority ownership and control of the company,” writes the firm.

Recently successful investments in financial firms

Sherborne invested in a 5% stake in 3i Group plc (LON:III), an international investor focused on mid-market PE, infrastructure and debt management, and disposed of the investment for £50 million, reportedly making a return of 38%. Bramson did not make any activist moves on the 3i investment.

After forcing activist reform at F&C Asset Management plc(LON:FCAM), where Bramson even took over as Chairman, Sherborne is said to have doubled its investment.

Electra’s rapid-fire deals in 2014

Earlier this month, Electra Private Equity Plc(LON:ELTA) announced its acquisition of Ogier Fiduciary Services, the fiduciary services division of the Ogier Group, for £180 million. Ogier Fiduciary offers high-quality trust, fund and company administration services, and is one of the leading offshore services providers with 3,000 clients and 10 global offices.

The PE firm was also recently in the news for its investment of £85M in the acquisition of Hotter Shoes, a shoe chain that sells comfortable footwear to persons in their 50s and above.

The transaction valued Hotter Shoes at £200M, and was the first acquisition out of Electra’s £450M war chest of funds raised for investments during 2014.

Electra’s performance

Electra Private Equity Plc(LON:ELTA) share price has increased by 267% during the 10-year period ended September 30, 2013, while the FTSE All-Share Index gained 140% during the same period.



Given that shareholders have reason to be pleased with Electra’s performance so far, it is likely that Bramson may have a passive investment, like that in 3i Group plc(LON:III), in mind.

In a statement, Sherborne Investors (Guernsey) B said “it intends to monitor the risks and rewards of continued investment in Electra, compared to other investment opportunities available to the partnership, and, accordingly, may dispose of all or part of such interests or purchase additional interests in Electra at any time.”

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