Sherborne Investors NAV Slumps as Navient Turnaround Enters a Critical Phase

Sherborne Investors (Guernsey) C Ltd has reported a sharp drop in net asset value for the first half of 2026, underlining just how closely its fortunes remain tied to US-listed Navient.

Net asset value, or NAV, fell from 56.08p per share at the end of December 2025 to 39.62p at 30 June 2026. That is a decline of around 29.4% in six months.

The company recorded a comprehensive loss of £115.0 million, driven overwhelmingly by a £114.5 million unrealised loss on its financial assets. However, there was a modest improvement after the reporting date, with estimated unaudited NAV recovering to 42.1p per share by 31 August.

Meanwhile, Sherborne continued buying back its own shares at a substantial discount, and investment manager partner Edward Bramson took on the chief executive role at Navient. That appointment makes the next stage of the turnaround especially important.

Sherborne Investors' key figures

Metric	H1 2026	Comparison
Net asset value	£256.5 million	£387.0 million at 31 December 2025
NAV per share	39.62p	56.08p at 31 December 2025
Estimated NAV at 31 August 2026	42.1p	Unaudited
Comprehensive loss	£115.0 million	£22.5 million loss in H1 2025
Unrealised investment loss	£114.5 million	£22.0 million loss in H1 2025
Loss per share	17.54p	3.22p in H1 2025
Shares repurchased	42.7 million	3.0 million in H1 2025
Gross buyback consideration	£14.9 million	£1.3 million in H1 2025
H1 dividend paid	0.1p per share	£647,379 in total
Ongoing charges ratio	0.08%	0.05% in H1 2025

The full figures are available in the original company announcement.

Why did the NAV fall so heavily?

Sherborne is not a conventional diversified investment trust. Its policy is to invest in one target company at a time, aiming to improve an undervalued business through active involvement.

That target is currently Navient. Sherborne Investors-managed funds own 31.4% of Navient's outstanding shares, making Sherborne the largest shareholder. SIGC pursues its strategy through an indirect interest in the US company.

This concentration means there is no broad portfolio to cushion a weak performance from the main investment. The interim accounts state that the valuation is particularly affected by the share prices of Navient and SIGC itself.

At 30 June, Navient's share price was $8.51 and SIGC's was 31.10p. The company estimates that a 10% movement in those share prices would increase or decrease its NAV by approximately £25.4 million.

That sensitivity is useful context. A meaningful recovery at Navient could have a substantial positive effect, but further weakness could also feed directly into Sherborne's NAV.

The investment is classified as Level 3 for accounting purposes. In simple terms, this means the value is calculated through an investment structure using inputs that require judgement, rather than SIGC directly holding a simple quoted share portfolio on its own balance sheet.

Bramson's Navient CEO appointment raises the stakes

Edward Bramson, a partner in Sherborne Investors, became Navient's chief executive on 5 June 2026, while retaining his position as chairman of Navient's board.

This is strategically significant. Sherborne's investment model is based on active involvement in companies where it believes operational deficiencies can be corrected. Bramson taking the top executive role places Sherborne much closer to Navient's day-to-day direction.

For shareholders, that could be viewed positively because the investment manager now has direct executive influence over the turnaround. It should also improve accountability, as the success or failure of the strategy will be harder to separate from Sherborne's involvement.

The other side of that argument is key-person risk. The outcome is now even more closely associated with Bramson's leadership and the ability to produce operational improvements at Navient. The interim report lists key-person risk among the company's principal uncertainties.

No new Navient forecasts, financial targets or timetable for the turnaround were disclosed in SIGC's interim report. Investors therefore have a strategically important appointment, but limited new information with which to judge the potential pace of progress.

Buybacks continue at a discount

Sherborne repurchased 42.7 million shares during the half year for £14.9 million, at an average price of approximately 34.8p per share.

The company says this represented an approximate 20% discount to its prevailing NAV. Buying shares below asset value can benefit the remaining shareholders because the company is effectively purchasing £1 of assets for less than £1, although the exact benefit depends on future portfolio performance.

All shares purchased during the period were cancelled. Issued share capital fell from 700 million shares to 647.4 million shares, with approximately 8.1% of the original issued capital repurchased to date.

The board renewed its authority at the May 2026 annual general meeting and expects to continue buying shares opportunistically.

There is a governance point to watch. A small number of shareholders voted against the waiver that allows connected parties to avoid making a mandatory takeover offer when buybacks increase their percentage ownership. Sherborne Investors owns 32.4% of SIGC's outstanding shares, so cancelling shares can increase its proportional stake without it buying more stock.

The board says it has engaged with holders representing the majority of votes cast against the resolution and intends to continue doing so.

Dividend remains small

SIGC paid a dividend of 0.1p per share in May, costing £647,379. The board currently intends to pay another 0.1p per share following the 2026 full-year results.

Navient paid dividends totalling $0.32 per share during the half, with SIGC receiving its proportionate economic share through the investment structure.

Still, the planned SIGC distribution is modest relative to the 39.62p half-year NAV. This remains primarily a capital-growth and turnaround proposition rather than an income-led investment.

Financial position and costs

The company held £672,217 in cash at the end of June and had net current assets of £684,433. Its annualised ongoing charges ratio was 0.08%, while direct operating expenses for the half year were £448,362.

Management fees of £1.4 million were paid within SIGC LLC, the underlying investment vehicle. No incentive allocation was due at the period end.

The directors concluded that the company remained a going concern and identified no material uncertainties that would cast significant doubt on its ability to operate for at least 12 months from approval of the accounts.

What SIGC shareholders should watch next

The central investment question has not changed: can Sherborne's active involvement improve Navient sufficiently to rebuild value?

The fall to 39.62p per share shows how painful the concentrated structure can be when the underlying valuation moves against shareholders. The recovery to an estimated 42.1p by the end of August is encouraging, but only partly reverses the first-half decline.

Buybacks below NAV provide some support and concentrate future value among the remaining shares. However, they cannot replace improved performance at Navient, which remains the main driver.

Bramson's appointment as Navient chief executive brings Sherborne's influence to a new level. It also makes future Navient results, strategic announcements and cash distributions the most important indicators for SIGC investors. Previous developments in the story are covered in my article on Sherborne's earlier NAV decline and Navient turnaround.

For now, SIGC offers a highly concentrated turnaround exposure, supported by low direct operating costs and discounted buybacks, but accompanied by substantial valuation and execution risk.