The £1.6bn company’s shares reacted badly to the developments, falling over 4% during trading this morning.
A review of Electra’s strategy was announced at the end of January after a power struggle within the business.
The company said the review “remains on track for completion in the Autumn” but in advance of that some “interim conclusions” have been reached and these will take immediate effect, chief among these being the axing of Electra Partners’ mandate.
In addition, two new board members have been appointed with former Aviva Investors CIO David Lis and former MD of Barclays Private Equity Paul Goodson joining.
Chairman of Electra Private Equity Neil Johnson said: "The changes announced today are designed to strengthen the corporate governance of the company and provide the board with the necessary support to undertake its detailed Review of strategy and structure. The board continues to examine its options to maximise shareholder value and will report its findings in the Autumn. 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.”
A statement from Electra Partners said it was “surprised and disappointed to have received notice of termination of the management contract with Electra.”
“Fireworks were always likely once Ed Bramson took over effective control of the Board,” said brokerage firm Numis. “He had previously been critical of the operational efficiency of Electra’s investments and the relationship with Electra Partners has been adversarial. Given this background, it is not a huge surprise to us that the board has decided to serve notice on the management contract. However, we believe that it will prompt a mixed response among investors, particularly given the strong performance of many of the team’s investments, including Park Resorts, TOBC, Axio Data and Elian.”