Buyer approaches Horlick's struggling Bramdean fund

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Bramdean Alternatives, the fund run by City "superwoman" Nicola Horlick's asset management company, has had an approach about a possible takeover. The board said yesterday that the move "may or may not lead to an offer being made for the entire issued share capital".

It also confirmed that the strategic review being conducted by Cenkos Securities, its brokers, was commissioned prior to the expression of interest. The review, which is to look at all future options for the fund, is likely to consider everything from selling it to winding it up.

Ms Horlick is reported to have been looking for a buyer for Bramdean Alternatives for some time. The fund, which is largely involved in hedge funds and private equity funds, was set up in 2004 and raised £131m when it was listed on the main market in July 2007. But it has had a rocky ride since the launch. Some 9.5 per cent of its assets were invested with Bernie Madoff, the New York financier whose $65bn (£44bn) Ponzi scheme won him the title of Wall Street's biggest ever fraudster. Bramdean lost £12m when the scam collapsed, and the share price dropped by more than 35 per cent in just two days when the involvement was made public in December.

Ms Horlick is now reducing Bramdean's exposure to hedge funds. At the peak, in December 2007, hedge funds accounted for 86 per cent of its investments; by the end of last month it was just 25 per cent. About a third of the fund is now in cash. The fund's management report, published earlier this week, says: "The investment manager intends to maintain cash reserves in order to fund draw-downs from the Private Equity and Specialty Funds."

Bramdean's biggest shareholder is Vincent Tchenguiz, the property tycoon whose Elsina investment vehicle took up 29 per cent of the shares for £40m at a time when Ms Horlick was struggling to raise the target amount. But Mr Tchenguiz's 100p-per-share investment has proved unwise. The fund's stock has been trading at well below 50p – although yesterday's news sent the price up by 20 per cent to close at 55.5p.

Overall, Bramdean Alternatives is now valued at £70m, a negative return of about 61 per cent in a market that is 24 per cent down. Other investors include Hampshire County Council Pension Fund, RMF Investment Management, which is part of Man Group, and Merseyside Pension Fund.

Ms Horlick is one of the City's best-known asset managers, dubbed "superwoman" for bringing up five children while pursuing a high-flying career at Mercury Asset Management and Deutsche Morgan Grenfell, which she left after a row in 1997.

Even a successful sale of Bramdean Alternatives will be a blow, as it is the only one of Ms Horlick's funds that is publicly quoted.

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