Rebellion ousts chairman of local investment fund

THE Guernsey-based chairman of a local investment fund has been ousted by rebel shareholders.

Chris Sherwell (31148884)
Chris Sherwell (31148884)

After shareholders of the listed fund Trian Investors 1 called an EGM, a small majority voted to remove Chris Sherwell as its chairman, though the rebellion against two other directors narrowly failed.

Investors with a large portion of the shares had already said they disagreed with parts of the company’s future planning and the directors had been accused of not being fit for purpose.

At the EGM 50.7% of the votes cast were against Mr Sherwell continuing in his role. Other directors targeted, Anita Rival and Simon Holden, narrowly escaped, with 49.6% of shareholders voting for them to be removed.

‘We thank our outgoing chairman Chris Sherwell for his leadership and many contributions to the company since the initial public offering and wish him well for the future,’ the company said.

Trian Investors 1 was co-founded by Nelson Peltz, an activist investor whose daughter Nicola is married to David and Victoria Beckham’s eldest son Brooklyn.

The company was launched in September 2018 and listed on the specialist fund segment of the London Stock Exchange with the investment objective of generating significant capital appreciation through the investment activity of its investment manager. The strategy was for the manager to be highly engaged as a shareholder, combining concentrated public equity ownership with operational expertise.

It holds a significant stake in Ferguson plc, the British-American multinational plumbing and heating products distributor with its head office in Wokingham, England, but the investment policy has been under pressure and there was criticism about a lack of liquidity.

Last year changes were made, broadening the remit of the fund from investing in single target companies to taking stakes in multiple companies.

This allowed Trian to take majority or even 100% stakes, rather than minority positions, in both listed and private companies, including those listed outside the UK and US. The fund currently has stakes in Unilever and US fast food chain Wendy’s.

Trian also changed how it paid money to investors, intending to reinvest its gains and turn itself into a permanent capital fund.

The board defended itself against the proposals to remove directors, raising concerns that a reconstituted board might seek to wind up the company and return capital to shareholders as soon as was practical. It said that this might create some short-term appreciation in the share price, but would prevent the company from compounding capital and generating attractive returns over a long period of time.

The company’s share price was at an all-time high during 2021, but its net asset value has dipped 29% since then ‘which would suggest that now may be a particularly inopportune time for the investment manager to monetise the Ferguson investment’.

The board also said it had conducted itself with integrity at all times, positioning itself at the centre of challenge and debate between all shareholders throughout a ‘successful and profitable strategy’ to date.

Mr Sherwell was unavailable for further comment.

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