Tchenguiz vs Horlick - handbags at dawn?

There's no going back now, as Nicola Horlick calls in the FSA in her row with tycoon Vincent Tchenguiz.

by
Last Updated: 30 Nov 2012

Nicola Horlick is famous for making a City fortune in the 90s while simultaneously raising six kids. Her firm Bramdean Asset Management took the dramatic decision to call in the FSA and accuse Tchenguiz of alleged market abuse, after his attempt last week to have the entire board of Bramdean replaced at an extraordinary general meeting.
 
Through his investment vehicle Elsina, Tchenguiz claimed to have the support of more than 50% of Bramdean shareholders. But in a letter to the FSA, Bramdean questioned the level of support claimed by Elsina, stating 'If the various statements made by Elsina as to the level of support for the requisition are untrue, they would amount to an offence under Section 397 of the Financial Services and Markets Act.’ In return Elsina issued another statement late yesterday reiterating that it has the support of half of the Bramdean shareholders, and calling Bramdean’s FSA letter ‘defamatory.’ Ouch.

Although rows between the mega-egos of super-rich City types are hardly unusual, the increasingly public nature of this one is. And by calling in the FSA, Horlick has effectively signalled that this one is going to go all the way to the wire; that if Tchenguiz is trying to persuade fellow shareholders to oust her and her board then he is not going to be able to do so without a real scrap.

So what’s it all about then? The Bramdean Alternative fund, in a nutshell. The BA fund invests in hedge funds and private equity; it's managed by Horlick’s firm and backed by Tchenguiz’s money. It’s fair to say that BA could also stand for Bloody Awful, as the fund’s performance since it was floated in 2007 has been pretty dire. It now trades at a substantial discount to net assets, exactly the opposite of what is supposed to happen, and leaving Tchenguiz with a hefty paper loss.

So not a great start to what could have been a very lucrative deal for both parties. Horlick in particular could hardly have asked for a more high profile endorsement of her modestly-sized firm than to get a serious private equity player like Tchenguiz on board. It doesn’t help Horlick much that her firm also turned out to be one of those that got its fingers burned by Bernard Madoff’s giant Ponzi fraud.

But what really got Vincent’s goat was the revelation last week that BA had received an approach from an unnamed bidder – and no, it’s not Tchenguiz. Apart from the fact that he probably doesn’t take kindly to being kept in the dark on such things, Tchenguiz’s real concern is that any sale would be at a knockdown price, making his chances of ever getting his money back considerably more slender.

It will be fascinating to see how this all pans out. These are two people who are both used to getting their own way, and this time one of them is bound to be disappointed.



In today's bulletin:
Brits must work until 70 and pay more tax
Van-maker LDV back from the brink
Tchenguiz vs Horlick - handbags at dawn?
Desperate directors turn to fraud
Eight ways to deal with the threat of insolvency

Find this article useful?

Get more great articles like this in your inbox every lunchtime

Upcoming Events

Subscribe

Get your essential reading delivered. Subscribe to Management Today