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F&C set for boardroom showdown

31st Jan 2011
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AIA

Investors in F&C Asset Management will this week decide the fate of the fund manager amid a proposed boardroom reshuffle at its AGM.

Rebel investor Edward Bramson’s Aim-listed Sherborne Investors is proposing the coup that could result in unseating chairman Nick MacAndrew and appointing two new directors – expected to be former UK chairman of PwC Ian Brindle and ex-Clifford Chance lawyer Derham O'Neill.

The Guernsey-based Sherborne vehicle owns 17.6% of F&C and has a declared supporter in Aviva Investors which holds almost 9%.

This gives Bramson a 26% head start, although shareholders are being told that it is going to be a close-run contest.

Earlier this month Sherborne published a letter to shareholders proposing changes to the board of directors, to “bring a fresh perspective on what we believe to be in shareholders' best interests.”

Bramson has pledged to introduce better financial oversight and argues that F&C overpaid for REIT and Thames River Capital - the two adventures into "absolute return" strategies.

F&C's board has appealed for loyalty and time to allow its diversification strategy to progress, along with advisory group PIRC which last week urged shareholders to oppose the reshuffle.

PIRC argues that the board may lose its independence with a “disproportionate board representation of a major shareholder” and no alternative management strategy in place.

Shareholders have until 11am on Tuesday to cast their votes by proxy and the AGM will take place at JP Morgan Cazenove’s London offices on 3 February.

F&C meanwhile has been at loggerheads with News Corp over political donations in the US.

In October last year Karina Litvack, head of governance and sustainable investment at F&C, told the FT: “We are concerned to see the company deploy shareholder funds for activities that are best left to the individuals whose views they reflect and are not obviously a business matter for the company.”

F&C holds US$1.1m - about 78,000 shares - in News Corp with a US$36.5bn market capitalisation.

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