Why Manifest, the UK proxy adviser, was sold and became Minerva Analytics

RI looks behind the scenes at the corporate governance specialist’s own governance battle.

Minerva was the Roman goddess of poetry, medicine, wisdom, strategic warfare, commerce, weaving, and the crafts.
It’s also the new name of Manifest, the proxy advisory firm, which went into administration late last year as a going concern and was then bought out of administration for £38,000 and what is believed to be a significant injection of equity capital by Sarah Wilson, its co-founder and CEO and her husband Tim Clarke, the company’s IT Director. Manifest went into administration in early March and re-emerged at the end of the same month under the new Minerva Analytics moniker.
Wilson, Minerva’s charismatic CEO, is regularly cited in the UK mainstream media on corporate governance issues and is a leading figure internationally in advising investors how to vote and engage on corporate governance and financial issues. The company was believed to be advising institutional investor clients with over $1trn under management at the time of the sale. It didn’t disclose its clients, but they are understood to have included the UK’s largest pension scheme, the £68bn Universities Superannuation Scheme, the UK’s National Employment Savings Trust (NEST) and NILGOSC, which administers the £7bn Local Government Pension Scheme for Northern Ireland.
The sale enabled the company to retain its circa 35 staff, a number that rises to as many as 55 at peak AGM/proxy season.
But it wiped out Manifest shareholders. They included Wilson and Clarke, its two biggest shareholders. Wilson held 375, 000 ordinary shares, 57,000 5% preference shares, and 55,000 redeemable 10% B preference shares.Clarke held 324,000 ordinary shares, almost 10,000 of the 2008 5% preference shares and 55,000 of redeemable 10% B preference shares.
The other major shareholder was William Claxton-Smith, a former Head of Corporate Governance at Insight Investment, a well-known corporate governance expert himself who lead a UK government inquiry into the fees charged by investment banks for rights issues. Claxton-Smith, who owned 300,000 ordinary shares, is understood to have provided significant capital to Manifest in recent years. He had been demanding that Manifest pay him back just over a million pounds in an unsecured loan.
Another shareholder was Michael Deakin, a one-time colleague of Claxton-Smith at Insight Investment where he had been the Chief Investment Officer.
Deakin had 50,000 ordinary shares. An independent trustee of the HBOS Final Salary Pension Scheme, he was also a former Executive Chairman Investment Committee at the UBS (UK) Pension & Life Assurance Scheme. Graphite Enterprise Trust PLC, an investment trust in unquoted companies, (now ICG Enterprise Trust plc) held 123,000 of ordinary shares and 105,000 of the 2008 5% preference shares.
Wilson, Clarke, Claxton-Smith and Deakin were all board members at Manifest. On January 2 2018, Cliff Weight, a Director at MM&K, the remuneration consultant, was also appointed as a Director.
Manifest consistently reported losses over years. In May 2011, it entered a company voluntary arrangement (CVA). This enables technically insolvent companies

to pay back creditors over a fixed period and continue trading. By July 7, 2016, the CVA was ‘fully implemented’, meaning creditors were paid in full.
But the financial difficulties of the organisation continued, leading to serious strategic differences among the board members.
In the autumn of 2017, Witherington Property Company Limited was hired to carry out an external review of the business and its finances, instigated, it is understood, by Claxton-Smith. It recommended reducing expenditure and improving business operations. At November 2017, the company had cumulative retained losses amounting to just over £2 million.
Around the same time, two new senior finance and management staff members were hired and introduced to clients. Sources with knowledge of the situation said Claxton-Smith believed this would stabilise the business. They said Wilson and Clarke claimed the new hires were acting like shadow directors and causing serious staffing problems and internal ructions.
Separately, in December 2017 Manifest lost one of its biggest clients, Royal London Asset Management, after the fund manager had gone out to tender earlier that summer. RLAM hired Glass Lewis as its proxy adviser.
It precipitated a series of events that led to the Manifest sale.
On March 1, 2018, Witherington issued Manifest with a letter of demand for payment of unpaid costs of just over £30,000 On the same day, Claxton-Smith demanded that Manifest repay the unsecured loan of just over one million pounds.On March 2, 2018, Claxton-Smith, told Manifest that in accordance with the UK’s Insolvency Rules he had made an application to appoint administrators over the Company with a hearing date scheduled for March 9.
Wilson and Clarke, as holders of a debenture, created on 1 January 2011, over the assets and undertakings of the Company, were not prepared to consent to the appointment of the administrators put forward by Claxton-Smith.
On March 8, following a majority vote, the Manifest board decided to appoint Jeremy Willmont, UK Head of Restructuring and Insolvency and Neville Side, a Director in the Restructuring & Insolvency department, of Moore Stephens, one of the UK’s biggest accounting and advisory firms, as administrators in an out of court appointment.
Contacted by RI, Sarah Wilson, CEO at Minerva Analytics, said: “There was a disagreement about the future strategy of the business that needed to be resolved in order for the company to find the best way forward. A majority of the board decided that the business was undercapitalised and that administration as a going concern with a view to sale was the only way to resolve this.” She declined to comment further.
Moore Stephens decided that the business was best sold as a going concern. A sale process was started and the books were opened to prospective buyers signing an NDA. Interested parties were given until 2pm on March 21 to submit best and final offers for the business. The sole offer received was from Minerva. There were no expressions of intent received from any

other parties. Fulfilling their legal obligations, the administrators accepted the best bid for the company and its creditors: the £38,000 put forward by Wilson and Clarke. Major clients have stayed with the business despite its travails. It is believed that RLAM was the only recent departure. Speaking in confidence, clients say they valued Manifest’s independent, bespoke voting advice and believe they will see this continue with Minerva. One of the main differences they say is that Minerva provides voting information, not recommendations like some of its competitors. Its investor clients make their own voting decisions.Market observers say a plurality of players in the proxy advisory business is also valuable because of the limited competition that has meant that ISS and Glass Lewis, the two big North American companies in the market, have become dominant.
On its website, Minerva says it is seeking to deepen and broaden its proxy voting service into more electronic voting on an improved technology platform, alongside more data for benchmarking and reporting tools and a broader research offering for what it calls Sustainable Governance.
RI tried to contact William Claxton-Smith and Michael Deakin for comment but they could not be reached.