The board of Electra Private Equity has announced it is reviewing its investment strategy just a few months after activist investor Edward Bramson joined the board.
Bramson was finally voted on to the Electra board in November with 53.5 per cent of shareholders voting in favour, along with Ian Brindle, former PwC boss and a colleague of Bramson's at Sherborne Investors.
Sherborne said in November its first move would be to introduce "a strategic review to consider all options in order to maximise long-term value for all shareholders".
Roger Yates, Electra's chairman, promptly quit.
Electra said this morning it is reviewing its policy and its structure, and "the review will look at all options for maximising long-term shareholder value."
Interim chairman, Dame Kate Barker, said:
Electra's strategy and investment policy has remained substantially unchanged for almost 10 years. Together with the outcome of the General Meeting on 5 November 2015, which indicated that a significant proportion of shareholders wish a review to take place, this has led the board to conclude now is the right time to undertake one. We remain open to further discussions with all shareholders.
The company said in the 10 years to September 2015, Electra's share price increased 210 per cent, compared to 72 per cent for the FTSE All-Share index. This corresponds to an annual return of 13 per cent, in line with Electra's targets of between 10 and 15 per cent.
However, during his battle with the board, Bramson claimed Electra was under performing, adding that his reforms could add £1bn in value to the firm. Roger Yates, the former chairman, hit back at the “exuberant and unsubstantiated" claims, and he said Bramson had no solid plan of action.
Alex Fortescue, managing partner at Electra Partners, said:
Electra Partners has invested £1.2bn over the last five years, has realised more than £1.5bn and generated portfolio returns for the shareholders of Electra of 23 per cent a year. These excellent returns have been generated by pursuing Electra’s strategy of investing across the private equity capital structure and focussing on substantial operational improvement and transformation in its portfolio companies.
Electra Partners has a strong pipeline of new opportunities, a particularly exciting portfolio and will continue to execute this proven strategy for all its investors over the coming months and years.
The current investment strategy and policy was approved by shareholders in 2006.