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Miton's Jackson buys more Barclays on Bramson swoop

Andrew Jackson believes the activist's decision to buy a 5% stake in Barclays makes the bank's investment case more attractive.

 
Miton's Jackson buys more Barclays on Bramson swoop
 

Miton's Andrew Jackson used Edward Bramson's swoop on Barclays (BARC) as an opportunity to buy more of the bank for his UK Value Opportunities fund. 

Shares in Barclays jumped yesterday after it emerged that activist investor Bramson had bought a 5.2% stake in the bank, including a £580 million holding for his Sherborne Investors C (SIGC) fund. 

At the end of February, Barclays was a top 10 holding in Jackson's £393 million fund, accounting for 2.1%. He did not disclose how big the position was following the latest transaction, which was funded by inflows into his portfolio. 

Jackson believes Bramson's unexpected move has increased the investment case for Barclays. 

'Barclays was already a top 10 holding [in the fund] predicated on the fact it was an out of favour company in an out of favour sector 10 years on from the financial crisis,' Jackson said.

'I thought the recent results were credible, although there is still lots of work to do. It is a complex business with many parts and Bramson will have an idea on how to improve these parts.'  

Barclays released its results in February, showing a 10% increase in 2017 core profit to £3.5 billion. 

However, this failed to drag Barclays back into the black with exceptional costs on the sale of its Africa division and tax changes causing a £1.9 billion loss.

Pre-tax profit was up from £3.2 billion in the prior year but remained well short of the £4.7 billion analysts had forecast. On a post-tax basis the business last year reported a £1.6 billion profit.

The bank has also promised to reinstate the dividend it cancelled two years ago.

While Bramson's recent success stories include F&C Asset Management and Electra (ELTA ), Barclays is by far his biggest project to date. 

Jackson (pictured) does not believe the challenge to turn around Barclays is too large for the activist.

'Yes it is unusual to see an activist investor on the shareholder register of a large UK clearing bank but I don't think Barclays is too big for Bramson to shake up,' the fund manager said. 

'He [Bramson] has a good record of constructive engagement and I think UK companies are generally good at engaging with shareholders. 

'History would suggest that this is the time to buy rather than sell Barclays at this stage of the game.' 

Jackson was appointed lead manager on UK Value Opportunities fund in May 2016 following the exit of previous managers George Godber and Georgina Hamilton

In the 12 months to the end of February he has performed well ahead of his peer group, returning 14.2% versus a sector average of 5.6%. 

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