Horlick puts on brave face as fund raises just £131m

Bramdean Asset Management, the investment company run by Nicola Horlick, has raised just £131m for a new fund launched to invest in alternative assets, around half the amount it had hoped to pick up.

Bramdean said it was pleased with the amount raised, despite the total figure being towards the bottom end of its original £75m to £250m estimate of demand from private and institutional investors.

However, Mark Dampier, head of investments at Hargreaves Lansdown, the independent financial adviser, said investors had been underwhelmed by Bramdean Alternatives Limited. "They must be massively disappointed by the amount they've raised," he said. "By comparison, New Star's most recent property fund took in more than £200m and Ms Horlick has hardly been short of publicity during the time in which Bramdean has been raising money."

The fund manager, launched in January 2005 by Ms Horlick, one of the UK's best-known investment figures, announced the launch of Bramdean Alternatives earlier this year.

The fund will invest in a variety of private equity funds, hedge funds and other vehicles offering exposure to alternative assets. It has already committed investments to a number of funds, including Terra Firma Capital Partners, Coller International Partners and the SVG Capital Strategic Recovery Fund.

Ms Horlick said she was not disappointed at all with the amount of money raised. "This is a new fund and to be absolutely frank, we had no idea exactly how much demand there would be, which was why we put such a wide range on the estimates," she said. "To pull in more than £100m for a new fund that is unique in the marketplace is very good."

However, Bramdean admitted demand for the fund had been hit by stock market volatility and the series of controversies faced by the private equity industry during the fund-raising period of the past month.

Ms Horlick said the background against which Bramdean had launched the fund had been so difficult that she had thought about pulling the flotation.

"I did think about that, but it is better to get the fund up and running because we can always come back and raise more money later on," she added.

"In fact, the statistics speak for themselves - this year, only two out of 12 new funds launched have raised £100m, and two launches have actually been completely withdrawn."

Mr Dampier said that scepticism about the sustainability of private equity and hedge fund returns had been one factor in the limited demand for the fund.

He also criticised Bramdean's marketing to private investors, who were asked to invest in the fund using an offshore bond wrapper provided by Axa, the insurance company.

Dealings in Bramdean Alternatives, a closed-end vehicle, are expected to begin on the London Stock Exchange on Monday.