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Activist Primestone Capital calls for cost overhaul at St James's Place

Activist investor Primestone Capital on Monday wrote an open letter to the board of British wealth manager St James's Place calling for a broad overhaul of the company's cost base to improve shareholder returns.

By Simon Jessop

LONDON, Oct 26 (Reuters) - Activist investor Primestone Capital on Monday wrote an open letter to the board of British wealth manager St James's Place SJP.L calling for a broad overhaul of the company's cost base to improve shareholder returns.

Primestone said St James's Place (SJP) share price had failed to reflect a doubling of client assets over the last five years and had been held back by "a bloated organisational structure", "excessive hiring", "excessive pay" and weak performance at its Asia unit.

The London-based fund, founded by former leading private equity dealmakers at The Carlyle Group, said it now owned 1.2% of St James's Place stock and was going public after failing to get the board to address its concerns "head on".

"SJP has delivered tremendous value for clients, advisers, employees and management … but not so much for shareholders over the last five years," Benoît Colas and Damian Hahnloser said in the letter.

"It is time for the company to address its high cost base and change its culture in order to deliver its full value-creation potential to long-neglected owners."

Specifically, they called on SJP to conduct an in-depth cost review and set "ambitious" targets to bring its cost base to the same level as best-in-class peers.

Primestone said it wanted the plan to be presented and discussed with investors, and for the company to regularly report on its progress.

It also called for SJP to improve its financial communications by more clearly reporting on revenues, costs, margins and important Key Performance Indicators.

(Reporting by Simon Jessop Editing by Rachel Armstrong)

((simon.jessop@thomsonreuters.com; +44 (0) 207 542 5052; Reuters Messaging: Reuters Messaging: simon.jessop.thomsonreuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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