UPDATE 1-Activist Bramson's Sherborne buys shares in 3i

Tue Jan 29, 2013 8:11am EST

LONDON Jan 29 (Reuters) - Activist investor Edward Bramson's Sherborne Investors and its broker Jefferies have been buying shares in 3i, the British private equity group said on Tuesday.

3i has been on a drive to reboot its flagging fortunes.

Former banker Simon Borrows took over as chief executive last year following shareholder frustration at poor share price performance and weak results from its buyout business.

"Sherborne Investors through its associates and Jefferies International Limited have been trading in 3i shares during January," 3i said in a statement. "We believe that Sherborne has acquired and then sold 3i shares to Jefferies."

The company said it believed Sherborne had acquired around 0.7 percent of 3i's shares, which it had then sold to Jefferies, its adviser and broker. Jefferies also bought further 3i shares and as of a week ago, owned around 1.6 percent of the company.

Last year Sherborne raised 207 million pounds ($325 million) with the aim of investing in an unspecified listed company it considered undervalued. A 1.6 percent stake in 3i would be worth around 40 million pounds.

Shares in 3i, which was set up after the Second World War to help the reconstruction of British industry, were up 3 percent at 267 pence by 1242 GMT, their highest since August 2011. The stock has risen around 47 percent since Borrows took over.

Bramson, a well-known but media-shy investor, has a history of taking on the managements of companies he considers underperforming.

He led a controversial boardroom coup at British fund firm F&C Asset Management in 2011, ousting the chairman and pursuing a root-and-branch shake-up of the 144-year old company after several years of lacklustre share price performance.

Last year, activist investor Laxey Partners asked for 3i to sell businesses and return the proceeds, but since 3i's change in leadership and action on cutting jobs and retrenching to its northern European roots, Laxey has sold out its stake.

A spokeswoman for Sherborne declined to comment. A spokeswoman for Jefferies could not immediately be reached.