Wealth Manager - the site for professional investment managers

Register to get unlimited access to Citywire’s fund manager database. Registration is free and only takes a minute.

Bramson's Sherborne targets 3i with £200m 'turnaround' fund

Bramson's Sherborne targets 3i with £200m 'turnaround' fund

Edward Bramson's Sherborne has executed a string of trades in 3i Group after raising just over £200 million to seed a fund targeting turnaround opportunities.

3i has taken the unusual step of alerting investors to the trades, stating 3i started to buy in on January 2 and in a series of follow up transactions bought and then sold additional 3i shares to Jefferies, the investment bank.

By January 15, Sherborne had acquired an interest of roughly 0.7% of 3i's total issued share capital, though since it has sold this on.

3i believes Jefferies has acquired additional 3i shares, and on 22 January estimated it owned around 1.6% of 3i's total issued share capital.

'The board notes that in November, an investment vehicle, Sherborne Investors (Guernsey) B Limited, which is managed by Sherborne Investors Management (Guernsey) LLC, raised gross proceeds of £207million with the stated objective of investing in a company which is publicly quoted, most likely on a UK stock exchange, and which it considers to be undervalued,' 3I said, drawing shareholders' attention to comments made about the vehicle, hinting it may be used to buy up to 30% of a single company.

Analysts at Oriel said it was unclear whether Sherborne would devote all £200 million to 3i, adding that at its current £2.5 billion market capitalisation this would represent 8% of 3i Group's shares.

'If Sherborne do take a sizeable stake, the next question is what is their aim? [Sherborne] do talk about investing in turnaround situations, and the "Borrows Plan" is being implemented with a substantial reduction in costs, repayment of debt and returns of capital to shareholders,' Oriel's Iain Scouller said.

3i is on track to sell investments this year and return between 15% and 20% of proceeds to investors once debt falls below £1 billion.

'It is certainly possible Sherborne and other shareholders could argue for a higher percentage of proceeds to be returned to shareholders,' Scouller added, arguing the investment company is a 'sell' because too much good news is priced in following 3i's recent 50% rally.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play Big City Bright Future

Big City Bright Future

Big City Bright Future, the brainchild of BlackRock, is a three-week work experience programme for school leavers looking to forge a career in the City.

Play Kames' Ennett: Trump good for US high yield, but beware Europe

Kames' Ennett: Trump good for US high yield, but beware Europe

Kames Capital’s head of high yield David Ennett believes the changing political landscape will be a positive for the US, but negative for Europe in 2017.

Play Philip Milburn: why inflation won't run out of control

Philip Milburn: why inflation won't run out of control

Kames bond fund manager views inflation as more of 'scare' than a 'problem' and is positioning his portfolios accordingly.

Read More
Your Business: Cover Star Club

Profile: change is the only constant for Quilter Cheviot

Profile: change is the only constant for Quilter Cheviot

This is not the first time we have profiled David Miller, but at the time of his previous appearance his company looked very different.

Wealth Manager on Twitter