London-listed Electra Private Equity has served notice on its investment manager, Electra Partners and will terminate its exclusive management contract in 12 months.
The board, which began a strategic review in mid-January, said Electra Partners will continue to manage its portfolio over the notice period, “although there may be some constraints on the rate of new investments”.
“The decision to serve notice to Electra Partners is a pragmatic step that will allow the board to act on any specific recommendations of the review in a more timely way,” Electra Private Equity chairman Neil Johnson said.
Electra Partners managing partner Alex Fortescue, who took on the role in January, said that the “the termination of the contract is a surprise and a disappointment”.
Electra has £1.8 billion ($2.6 billion; €2.4 billion) of assets under management as of 31 March.
The board has also appointed non-executive director Edward Bramson to a newly-created role of interim chief executive officer as part of a newly formed executive team that that will provide “administrative and analytical support in relation to the review process”, the company said. It is also looking for a chief financial officer.
The review was initiated after Bramson and Ian Brindle were appointed to the board following a contentious shareholder vote on their nominations in November. The pair represent the listed investment trust’s largest shareholder Sherborne Investors with an almost 30 percent stake.
The board has also appointed David Lis, former chief investment officer at Aviva Investors, and Paul Goodson, former managing director of Barclays Private Equity, as non-executive directors with immediate effect.
Aviva is an investor in Sherborne, according to reports.
The new board appointments follow the selection of new chairman Johnson, who took up the role on 12 May. He replaced the interim chairwoman Kate Barker, who took over after Roger Yates’s resignation in November following a shareholder vote.
“The board continues to explore a range of options including retaining the services of Electra Partners as investment manager under a mutually acceptable agreement,” Electra said.
Electra Partners said it had “established relationships with a number of investors” and will work with them and Electra to invest its pipeline of deals.
“Fireworks were always likely once Ed Bramson took over effective control of the board,” Numis Securities said in a note. “He had previously been critical of the operational efficiency of Electra’s investments and the relationship with Electra Partners has been adversarial.”