Wealth Manager - the site for professional investment managers

Register to get unlimited access to all of 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 Navigating geopolitical risk with ETFs

Navigating geopolitical risk with ETFs

ETFGI’s Deborah Fuhr on how investors can use exchange-traded funds to position their portfolio.

Play Sarasin’s Boucher: why I like salmon with chocolate

Sarasin’s Boucher: why I like salmon with chocolate

Henry Boucher, manager of the £129 million Sarasin Food & Agriculture Opportunities fund, explains why he is gobbling up salmon and chocolate stocks.

Play Alibaba hype, the UK slowdown and opportunities in European sovereign bonds

Alibaba hype, the UK slowdown and opportunities in European sovereign bonds

Libby Ashby and leading wealth managers analyse what the Alibaba IPO hype means for Chinese equities, slowing growth of the UK economy and whether there’s anything left to play for in the European sovereign bond market.

Your Business: Cover Star Club

Profile: Barclays' former advisory boss on his move into property

Profile: Barclays' former advisory boss on his move into property

On paper, Rick Denton might have been expected to finish his career in banking

Wealth Manager on Twitter