Horlick’s Bramdean off 12%, after missing rising market

Nick Goodway
19 Aug 2009

Nicola Horlick — the fund manager dubbed City superwoman — looks to have missed out on rising share prices and hedge fund values between April and June, according to the latest update from her only quoted vehicle Bramdean Alternatives.

The investment fund was the subject of a long battle between Horlick and its largest investor, Vincent Tchenguiz, earlier this year.

Tchenguiz managed to replace the entire board of the company, while Horlick made and then withdrew a takeover approach, without ever declaring a bid price.

Now Bramdean has revealed its asset value dropped 12% in the three months to the end of June, much of which can be blamed on the falling value of the pound against the dollar.

Almost 70% of the fund's investments are private equity or hedge funds based in the US.

Over the same period, the shares gained 27% — largely as a result of Tchenguiz's action — reducing the discount to net-asset value to 35%.

But the shares are still 18% down on the price they were first offered at in June 2007.

Bramdean also confirmed 6.2% of its worth is still locked in two US funds which have stopped redemptions — effectively preventing investors withdrawing cash.

Horlick started taking a cautious view at Bramdean in autumn 2008, and now more than 38% of assets are held in cash with another 20% in hedge funds.

But one of the key bones of contention between Horlick and Tchenguiz remains. She has made commitments of $226.8 million to 18 private equity and speciality funds, but the total net asset value of Bramdean is just $178 million — by no means all of which is readily convertible into cash.

Bramdean said today that Horlick's defensive stance had continued through the second quarter, and would continue. It also noted that early deals she did in 2007 had been with funds which have seen significant write-downs.

Although Tchenguiz had threatened to sack Horlick as the fund's manager, she remains in charge. But the fund hinted at a change in direction. It said: “The intention is, in time, to reinvest part of the transitional portfolio into lower risk, lower volatility strategies.”

It also noted of Horlick: “Since the company's investment programme is now largely complete, the investment manager will be focusing on monitoring the exposures of underlying managers as well as researching low-risk, high-liquidity strategies to deploy the company's cash.”