Nicola Horlick, a “superwoman” by trade, founded and runs a closed-end investment fund called Bramdean Alternatives Limited (LSE: BRAL). She named the fund after a Hampshire town in which she has a house. Both the fact she did so and the house itself can be described as “quaint.” Here is a description of what Bramdean does:
Bramdean takes on the responsibility of investing with funds and fund managers on behalf of our clients. We research the worldwide investable universe of alternative fund managers and funds, searching for the most talented managers and highest quality investments available to our clients. Our goal is to find investments that will deliver superior returns and which are lowly-correlated to more traditional investments.
Our own experienced investment management team together with our network of industry specialists enable Bramdean to access managers and funds that are often closed to new investors.
Ah yes! Access! But what kind of access was Bramdean getting?
Bramdean Alternatives Ltd (BRAL.L) said almost 10 percent of its holdings were exposed to Madoff, the U.S. company at the heart of an alleged $50 billion fraud, sending shares in the UK asset manager crashing on Friday.
Bramdean, headed by well-known fund manager Nicola Horlick, said it had two holdings that maintain trading accounts with Bernard L. Madoff Investment Securities that represented 9.5 percent of its net asset value at the end of October.
Separate WSJ piece:
Before news of the Madoff scandal broke in December, Ms. Horlick had publicly endorsed the money manager, calling him “very, very good at calling the U.S. equity market” in an interview with the Financial Times.
If you follow that second link, you can read how Horlick has done so well at getting access that she may well be out of her own firm by a mob of shareholders.
Maybe this played a part:
Apparently allocating assets into the biggest Ponzi scheme since the Securities Exchange Company is NOT a good call. Math indicates that it is in fact detrimental to investment performance. Maybe some due diligence should have been due done? Isn’t that why people pay fund of funds fees? Isn’t that the only reason? Oh wait, I forgot, they were paying for access. Silly me! Over the same time period as outlined above, the S&P 500 returned -30% to her closed-end alternative FoF’s performance was -45% — not what you’d expect from a “superwoman.”
Recommendation: Now this is not to say that all women shouldn’t run money. Only a fool would say something so blatantly sexist. But I will write it. Women shouldn’t run money. If you do find yourself in a situation wherein a woman is running money for you, you can expect them to charge you for “access” to a money sucking blackhole just as was done here.
It’s worth expanding this negative sentiment across all people who mostly trade on their name, whether it be Uma Thurman’s husband or whoever the bullshit artist du jour is. Sometimes, not often, but sometimes WHAT you know (and the desire TO know rather than wallowing in your own lazy ignorance) matters more than WHOM you know.
HT to WC Varones|