Update: Bramson's bid for Barclays board seat rejected

AGM yesterday

Anna Fedorova
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Barclays under activist attack
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Barclays under activist attack

Activist investor Edward Bramson has seen his bid for a seat on the board of Barclays rejected with 87% of votes against him, including institutional investors from Aviva and Jupiter.

In yesterday's AGM, the Sherborne Investors partner and portfolio manager Bramson saw only 12.8% offering him siupport. Three quarters of the register cast a vote, according to the The Times.

Bramson, who is the second largest shareholder of the bank with a 5.5% holding, said he would carry on his campaign in forcing Barclays to address its underperforming arms, such as the investment bank.

However, despite a victory over Bramson, Barclays saw significant protest over its pay policy at the AGM with 30% of shareholders voting opposing the bank's remuneration policy. In a statement, Barclays said it would "seek and reflect carefully on feedback from our shareholders in order to understand more fully the reasons for the opposition to this resolution".

Barclays vs Bramson

Yesterday, it was reported he had found a new target in his campaign against Barclays, attempting to portray the business as risky due to its reliance on leveraged loans.

Bramson had told other top shareholders the bank relies too heavily on its financing of leveraged buyouts.

This part of the business sees Barclays lend to private equity firms and other businesses, with the bank having financed some of the largest leveraged buyouts in recent years, such as raising $10bn of junk bonds to help investment group Brookfield buy Johnson Controls' auto battery business in a $13.2bn deal.

According to the FT, Bramson had argued that this line of revenue will dry up in the event of another financial crisis and leaves the bank open to some bad debts that it is taking onto its own balance sheet.

The activist investor wants to start shrinking Barclays' investment bank, putting him on a collision course with chief executive Jes Staley and the bank's current board members. In his view, this area of the business does not generate enough profit to justify continuing to run it.

His latest attack touches a sore spot, as the $1.4trn leveraged loan market has come under the radar of global regulators on concerns over loosening of credit standards, which could create a shock in the global financial system if many companies are unable to pay their debts.

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