Carmignac fund manager quits after deals with Mandelson-linked firm

Carmignac equities fund boss departs after investing in scheme run by Lars Windhorst, who is advised by the former Business Secretary

Jim Armitage
City editor
Tuesday 22 March 2016 00:56 GMT
Conservative Party donor Lars Windhorst
Conservative Party donor Lars Windhorst (Getty)

With Lord Mandelson on his advisory board, a private yacht and jet to his name and a reputation for throwing the best City parties, Tory donor Lars Windhorst looks every bit the successful financier.

The charming 39-year-old has opened swanky new offices in London’s Savile Row to house his investment company, Sapinda. According to the accounts, Sapinda made €187m (£146m) last year, if you include the supposed increased in the value of its assets.

Yet much controversy swirls around the German entrepreneur, perhaps not surprising given a financial history pockmarked by two corporate collapses, personal bankruptcy and a suspended prison sentence for breach of trust.

Now memories of those previous disasters returned as one of Europe’s top fund managers suddenly resigned with no job to go to, after becoming entangled with one of Mr Windhorst’s investments.

Mr Windhorst’s teenage entrepreneurship led to his being praised by the then German chancellor, Helmut Kohl. In his 20s, his wealth and reputation soared as he became a poster child for start-up entrepreneurship. But it all went wrong as the technology and credit bubbles burst and bankruptcy struck.

He moved to London six years ago to start up again with Sapinda and a string of investments listed on lightly regulated stock markets across Europe. However, they remain controversial, reportedly often funded by complex loans backed by offshore companies also controlled by Mr Windhorst.

Perhaps his most high profile London adventure was his attempt to buy Petropavlovsk, the owner of Russian goldmines founded by Peter Hambro. Mr Windhorst amassed a big stake, yet rumours swirled that his plan was backed by unidentified Russians wanting to get their hands on the mines. Petropavlovsk’s shareholders turned him down.

The fund manager who resigned had been under investigation by his employers, the €52bn European asset manager Carmignac Gestion, after getting involved with a Windhorst deal. Carmignac’s head of European equities, Muhammed Yesilhark, had, using the company account, invested in a tiny Windhorst business called Sequa Petroleum; its shares were barely ever traded and its sole asset was a stake in a Kazakh exploration licence, according to the Financial Times. It was a curious investment for Carmignac. The company spotted it, and reversed it within weeks.

It then turned out Mr Yesilhark had, at about the same time, invested with his personal account in another Windhorst scheme which looked extremely lucrative.

Carmignac would not comment on the connection between the trades and the fund manager’s resignation, although sources said the company no longer has any relationship with Mr Windhorst. Mr Yesilhark’s fund had not been performing well, and he may have been feeling the pressure anyway, while friends of Mr Windhorst point out that his departure was 18 months after the trade.

Whatever the truth, trouble certainly seems to follow Mr Windhorst around.

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