Eureko gets behind F&C as war continues over Bramson putsch

EMBATTLED F&C Asset Management received support yesterday from its second-biggest shareholder in its attempt to repulse a campaign for a boardroom shake-up.

The intervention by Dutch insurer Eureko came as F&C, which employs about 130 in Scotland, also unveiled a streamlining of its infrastructure that will see the best part of 110 jobs outsourced to save 12 million a year.

It follows Edward Bramson's investment vehicle Sherborne, F&C's biggest investor with 17.5 per cent, securing a shareholder EGM on 3 February in which he wants to install himself as chairman by removing Nick MacAndrew.

Bramson also wants to replace the fund manager's non-executive director Brian Larcombe with Ian Brindle, chairman of Sherborne, with the rebels citing F&C's under-performing share price in recent years.

However, Eureko, speaking for 10.5 per cent of F&C, threw its weight behind incumbent management, including chief executive Alain Grisay, yesterday.

Gerard van Olphen, the Dutch group's chief financial officer and vice-chairman, commented: "We have every confidence in the board of F&C Asset Management and the strategy it is pursuing.

"Eureko is not only a major shareholder of F&C but also an important client as F&C is one of our principal asset managers. Creating uncertainty around F&C is not in our best interest nor in that of our policyholders.

"Furthermore, no alternative strategy or business plan has been put forward so far."

The vote of confidence from Eureko follows F&C's third biggest shareholder, Aviva, with 6.5 per cent, throwing its weight behind Bramson, making the outcome of next month's EGM hard to call.

As effectively what will become part of its defence against the boardroom putsch, F&C said yesterday that it is to outsource its operating platform to cut costs and simplify its business model.

It said it had shortlisted two outsourcing partners in a move which it said would "materially enhance shareholder value".

F&C said: "The outsourcing arrangement will affect approximately 110 staff, which represents about 70 per cent of the group's existing operations staff, a significant number of whom are expected to transfer to the outsourcing provider."

An F&C spokesman later declined to quantify what "significant" meant.F&C said the initiative would not affect the staffing of investment, distribution and client service functions.

He said that the fund manager's Scottish operations, which include private equity, some investment trusts and part of the finance department, are unaffected by the outsourcing changes.

The group said the restructuring programme would reduce annual operating costs by at least 9m a year, with an additional 3m a year from premises savings, believed to be in London.

The first of these savings are expected to kick in the second quarter of 2011, and be largely achieved by the third quarter of 2012.