More strife for Horlick as Tchenguiz starts revolt

Tchenguiz, who enabled Horlick to launch the fund two years by taking a 29% stake at a cost of £38 million, has called an extraordinary meeting of shareholders to oust the board.

Horlick manages the fund but does not sit on its board which is a collection of the City's great and good, headed by former 3i chief executive Brian Larcombe. Tchenguiz met Larcombe on Tuesday but said his proposals to restructure the board were rejected.

Larcombe has already come under fire from shareholders.

James Carthew, managing director of Progressive European Markets which holds about a 1% stake in Bramdean Alternatives, said he had already called on Larcombe to wind-up the fund. "It's not working," he told Larcombe. "You have to give the money back."

In the 20 months since its launch Bramdean Alternatives, which has invested in a mixture of hedge funds and private equity, has produced a negative return for its holders of 61% compared with a fall in its sector of just 23%.

Horlick had another major setback when she was forced to reveal that almost 10% of the fund had been invested with crooked New York financier Bernie Madoff, which lost the fund around $15 million.

Bramdean Alternatives shares jumped 20% to 55p yesterday after its said it had received a takeover approach and a Bramdean spokeswoman refused to name the bidder.

At the same time Horlick revealed that she had already asked her financial advisers Cenkos to look at options for the fund which could range from finding another buyer to winding it up.

In another twist, Horlick, who is as well-known for her self-publicity as her fund management ability, is a tenant in Tchenguiz's head office building in Park Lane.

It is understood that Tchenguiz is launching his assault against the board rather than against the fund manager because that will be easier to achieve.

The removal of the board requires a 50% vote to succeed. Tchenguiz holds almost 30% of the shares and is fairly confident he can count on others to take him over 50%. These could include the Man offshoot RMF Investment Management which has a 19% stake.

However Horlick can probably count on the support of Hampshire Council Pension Fund (which holds 19%), and Merseyside Pension Fund with 15%. Both local authorities followed Horlick when she left Société Générale to set up her own business.

A vote to remove Bramdean Asset Management as the manager of Bramdean Alternatives would need a 75% approval to get through. But it is believed that Horlick has a clause in the management contract entitling her to three years of fees if her firm were sacked which could amount to as much as £7 million.

Bramdean Alternatives shares have lost 45% of their value since it floated and the whole business is now valued at just over £90 million.

Horlick has been selling its holding in hedge funds rapidly since December.

Tchenguiz's request for the meeting was delivered to Bramdean last night but the fund had not responded by early this afternoon.