Bramson warns F&C staff face redundancies

Sherborne Investors’ Edward Bramson’s eagerly-awaited strategic review into F&C has laid out plans to cut costs, leading to staff redundancies.

The group this morning reported a £4.8bn fall in AUM for the third quarter, with its open-ended fund business posting a net outflow of £559m.

Activist investor Bramson has moved swiftly to convince investors F&C can reverse the losses it has suffered in the past few months, upping its expense reduction target from £12m to £33.2m.

Bramson said there will be staff cuts primarily affecting back office and corporate staff, with "limited impact" on the investment teams and client-facing staff.

Bramson has laid out a revised strategy for the group, in which the group will strive to generate above average growth with below average volatility.

"No reductions are being implemented in the group's compliance or risk functions."

He added the job losses will ensure the group will not move to cut its dividend.

"The third quarter was a difficult one for the fund management industry given the sharp sell-off in risk assets," he said.

Bramson added he is looking to build out the group's investment trust range and will unveil plans in the first half of next year, in the second phase of his strategic review.

In June F&C appointed Charlie Porter to head up the group's investment trust business, alongside the group's retail and wholesale open‐ended funds business.

F&C also announced the hire of two independent non-executive directors, with Keith Jones and Keith Percy joining the board, subject to regulatory approval.

Keith Jones was formely chief executive officer of Morley Fund Managemnt, while Percy joins from being chief executive officer of Société Générale Asset
Management UK.

Sherborne Investors, the company Bramson founded, won its public spat to oust members of F&C's board in February.

The activist installed three of its members onto the board, dislodging the chairman at the time, Nicholas MacAndrew, and director Brian Larcombe.

Sherborne's Ian Brindle and Derham O'Neill were appointed as their replacements, with Bramson becoming chairman.

The change in board members marked the end of a bitter row, in which Sherborne publicly criticised F&C's acquisition of Thames River, claiming the purchase was harmful to shareholders' interests.

Bramson has been steadily increasing his shareholding in F&C and has built up a 20% stake in the group.