After more questioning he admits that he and his "research function" have spent 18 months painstakingly scruntinising every inch of F&C. He says he "made the decision to invest in April".
So for nine months Sherborne stalked the company, building up a 9.9pc stake plus another 7.6pc in contracts for difference. These were converted into voting shares ahead of the general meeting which he called in December.
The requisitioning may have been the starting gun for F&C's MacAndrew but for Bramson and Sherborne, victory was already in the bag.Over Christmas and into January, F&C's board dashed about, seeing its institutional investors, promising reform, cost savings and efficiencies while warning of the dangers of Sherborne. But they were trailing in Bramson's wake; plenty - including Aviva - had already pledged allegiance to the rebel.
One source close to Bramson said: "He leaves nothing to chance, every detail is carefully considered and worked out. He is thorough and everything is done before anyone else knows about it."
Perhaps even Bramson recognises that there's chance he could come across slightly, well, mechanical. He addresses a few personal questions."I was born in London but I moved to New York in 1975 so I've been there over 30 years," he says. He's married to an American, they have no children but "we have horses" which is why he says he won't be relocating to London to look after F&C.When it's suggested to him that might not impress F&C's private investors, already among the most tested in the industry after years of upheaval at the company, he shrugs."I have a business in Port Oregon [on the west coast of America] - so that's just as far from New York as London is," he says.Bramson, 61, founded Hillside Capital in New York in 1977 as one of the first specialist private equity firms in America. Sherborne was founded in 1986 to invest in and turnaround both private and publicly listed companies.
He co-founded another business in 2002 but, according to his website, he "withdrew in June 2006 to focus on Sherborne's international activities".The biography on Sherborne's website, to which he directed F&C's investors, describes Bramson as being "responsible for operational turnarounds at portfolio companies in the chemicals, consumer products, electronics, media and packaging industries and pioneered many of today's accepted buyout techniques".He's had mixed results. He was chairman of Ampex Corporation, a Nasdaq-listed manufacturer of digital devices from 1992 to 2007 after which the firm filed for Chapter 11 bankruptcy protection. In the UK, he ran Elementis, the chemicals company, and 4imprint, both of which were London listed.Institutions, including Aviva, made large amounts of money from his efforts – which is why they are so keen to hand him F&C.
But Bramson has no experience in asset management and skeptics warn that the business is hard for outsiders. One veteran fund manager said: "It's a bit like football: you don't need to have been a star striker to be a good manager. But there's a general acceptance that if you haven't had a long association working in football, you're going to find it tough leading a team. Fund management is a bit the same."
And then there's the fact that it is F&C: a group where both staff and clients are growing extremely tired of upheaval.
Proponents insist Bramson has a plan, which includes radically reducing the cost base for a start.The say he will quickly prove his worth. If not, as MacAndrew told the private investors: "You can direct the questions to him at the annual meeting." That'll be one to watch. By Simon Gray - After a year in which some reports suggested that London’s hedge fund industry was about to up sticks and move en masse to Switzerland, there are still few signs that the city’s dominance within Europe is coming to an end. The number of actual departures so far is small even if some of the names involved have been high-profile; meanwhile the ranks of the industry are being swelled by a surge of start-up operations launched by individuals exiting existing asset managers or the proprietary trading desks of investment banks.
But professionals caution that while London’s continuing appeal as an alternative asset management hub is evident, it is still too early to assess the long-term impact of a series of developments pressing on hedge fund managers: regulatory changes agreed by the European Union in November affecting alternative fund managers; new rules, both European and domestic, governing financial sector remuneration; a significant increase in the tax burden on high-earning individuals; and tighter restrictions on the scope of non-domiciled status for UK residents that can allow qualifying individuals to escape taxation on their worldwide income.
At least part of the furore over the prospect of a mass exodus stemmed from a survey by consultants Kinetic Partners that suggested that hedge fund managers representing as much as 25 per cent of employment in the sector were in the process of moving or planning to leave for Switzerland, although the firm now plays down the issue, noting that London’s appeal remains powerful from both a professional and a lifestyle perspective.
“London has always been the primary location for hedge fund [managers], and this is not going to change any time soon,” says Kinetic founder member David Butler (pictured). “It still offers an ideal location for fund managers in terms of the financial services offering, transport connections to global cities, networking opportunities and access to resources, and most importantly, it is still a fantastic, vibrant and ambitious city in which to live and do business. What is true is that London will have to raise its game to compete with emerging jurisdictions that offer lower taxes and lighter regulation.”
Other members of the industry concur that while many hedge fund managers have probably at least considered the idea of relocating to another jurisdiction, the number that have actually decided to take the plunge remains small. “Nothing has really changed,” says Chris Cattermole, sales manager for Advent Software’s Geneva system for Europe, the Middle East and Africa. “A handful of fund managers have moved some operations out to Switzerland, but in most cases it’s only certain parts of their business, and they still have a footprint in the UK.”
Much of the media furore has been sparked by the establishment of offices in Switzerland by firms including Brevan Howard (Geneva), BlueCrest Capital and Moore Capital (both Zurich), coupled with the departures of key individual such as Brevan Howard founder Alan Howard and BlueCrest’s Michael Platt.
“Many managers now, particularly if they’re not UK-domiciled, are much more willing to countenance conducting some of their activities offshore,” says Mark Stapleton, a partner in the international tax group of law firm Dechert. “That said, the people who have announced they are moving to Switzerland, I suspect, tend to be those who have made their money and are quite keen to live offshore anyway. But there’s no doubt that the increase in the top rate of income tax from 40 to 50 per cent has led to a lot more people doing tax planning.”
A more bullish view comes from Andrew Rubio, chief executive of financial outsourcing and consultancy firm Throgmorton, who says: “London is still the leader of the pack, the best place in Europe. Moving to Switzerland only works if you’re big enough to have an infrastructure there but still have the main part of your business in London, because it’s the centre of the capital-raising universe in Europe.”
Rubio notes that Frederic Denjoy, one of the Brevan Howard partners who moved to Switzerland, has now returned to London to start up his own business, and says that the needs and interest of family and children are another factor that make most industry professionals reluctant to move. “There’s a huge amount of inertia keeping people in London,” he says. “Unless you’re all ultra-rich, it’s difficult to persuade your people to leave. It’s true that it has come close to a tipping point, but ultimately
London has been reaffirmed.”
One of the key issues on the agenda of hedge fund managers over the next couple of years will be the implementation of the impending EU Directive on Alternative Investment Fund Managers. The directive, which will come into force early in 2013 and govern many aspects of how alternative managers do business, is regarded by most London-based professionals as a vast improvement on the first draft published in April 2009, but it remains far from popular across the industry.
While the directive will create a single European market for funds aimed at sophisticated investors and allow managers to market their products across EU borders with minimal formalities, some of the provisions still cause dismay. Overall the legislation is viewed as adding a significantly increased regulatory burden out of proportion with any benefits it may bring in terms of investor protection or identification of potential systemic risk.
In addition, there are a couple of complications. First, although the directive sets out the regulatory framework within which funds marketed in Europe and their managers will operate, much of the detail must be filled out by secondary legislation or implementing regulations drawn up by the European Commission on the advice of the new European Securities and Markets Authority, a much more institutional body than the Committee of European Securities Regulators which it replaced.