Investor's Champion Blog
Provides refreshingly forthright, independent comment on predominantly small cap companies and specialist investment funds. Informed opinion, based on first-hand research, but pulls no punches in exposing management weaknesses.

Bramdean Alternatives - £250m sounds like a big ask!

I see that Bramdean Alternatives, a fund of funds vehicle established by Bramdean Asset Management is being promoted through ALL IPO.

Bramdean Asset Management was founded by Nicola Horlick who first hit the headlines in 1997 when she flew to Frankfurt (accompanied by numerous members of the press) and pleaded with the senior management of Deutsche Bank to keep her job (or something on those lines). I’m sorry to say that I remember this incident much more than anything relating to her investment prowess at SG Asset Management, a firm she subsequently ran, no doubt very skillfully. I also see that she hit the headlines again in 2005 when refusing to hand over her £50,000 diamond ring to an armed attacker.

You have to admire Ms Horlick’s determination and indeed her survival instincts, however, investors will surely be giving her their money to look after on the basis of her investment management prowess and not much else.

Bramdean Alternative’s principal activity is to invest in a diversified portfolio of private equity funds, hedge funds and specialty funds for the purpose of achieving long term capital appreciation. It’s looking to raise up to £250 million, which sounds quite a lot to me in the current market.

I’m not convinced how they intend to gain access to the best hedge and private equity funds, the majority of which are, I believe, closed to new investors. As a relative start up (Bramdean was only founded in 2005) I assume its existing hedge and private equity fund exposure is relatively limited and therefore they won't carry much weight with the better funds.

Finally (and the objectivity of this opinion is clearly questionable, coming as it does from someone offering access to new issues through their own firm!) I remain sceptical about the likely success of any new issue promoted through ALL IPO.

The best IPOs generally get well supported by their sponsoring broker who has the incentive of earning attractive fees. In my opinion those brokers willing to share their fees are clearly anticipating difficulty raising funds- otherwise why on earth would they agree to split such potentially lucrative fees!

Bramdean has seemingly chosen to market directly to the private investor using ALL IPO as one route. A fund raising of this size surely warrants the services of fully incentivised broker to support it. I see that Cenkos is the sponsoring broker but I’m not aware if they are actively promoting the issue.

The last significant main market issue promoted through ALL IPO was Vector Hospitality which failed to make it to the finish line. I’m not convinced that Bramdean will do any better!


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