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City superwoman Nicola Horlick's flagship-quoted investment fund Bramdean Alternatives, which lost £12 million when it invested with jailed fraudster Bernie Madoff, has received a takeover approach from an unnamed bidder.
The move follows significant underperformance by the fund since it was launched 20 months ago and a sharp fall in its share price when it revealed it had almost 10% of its assets tied up with disgraced New York financier Madoff.
Any move to take Bramdean Alternatives private would come as a blow to Horlick, who is as well-known for her self-publicity as she is for her fund-management abilities. This is her only publicly quoted fund. The property fund and Dublin-based investment funds she runs are much lower profile.
It also emerged today that Horlick had already asked her broker Cenkos to look at alternative options for the fund, which range from trying to find a buyer to winding it up.
The fund is run by Bramdean Asset Management, which is majority owned by Horlick and her management team. She set up Bramdean in 2005 after bringing up five children while being a top fund manager at Morgan Grenfell and SocGen.
Horlick was heavily critical of US regulators over the Madoff scandal but others questioned her judgment in putting money with him.
Bramdean Alternatives shares rose 13/4p to 48p today after it revealed the bid approach. Property tycoon Vincent Tchenguiz is the fund's biggest shareholder. He backed Horlick when she first raised the fund in the summer of 2007. She had been looking for between £70 million and £250 million to launch it but struggled to raise as much as she had hoped. Tchenguiz stepped in, buying a 29% stake at the offer price of 100p.
That ensured the fund was valued at £131 million at launch.
Since then, the share price has dived and the fund has produced a negative return of 61% compared with an overall loss across the sector of 24%. It has a market value of £70 million.
Tchenguiz is believed to have been considering a bid for Bramdean Alternatives, but is not behind today's approach.
In her monthly note to Bramdean Alternatives investors, published two days ago, Horlick said the fund had again underperformed its competitors. She has gradually been reducing its exposure to hedge funds from its peak of 86% of the fund in December 2007 to 25% by the end of March.
