Search: Guardian Unlimited WebHome (Related) UK news (Related) World news (Related) Politics (Related) Business & Media (Related) Comment & Leaders (Related) Focus (Related) 7 Days (Related) Sport (Related) Review (Related) Travel (Related) Cash (Related) Observer Woman (Related) The Observer Magazine (Related) Food (Related) Music (Related)
Search The Observer
ToolsText-only version (Related) Send it to a friend (Related) Save story (Related) The Observer Front page (Related) Story index (Related)
Recent articlesImperial to raise stakes for Altadis (Related)
House prices fall as new rate rise threat looms (Related)
Last-ditch efforts to win pensions pledge at Boots (Related)
David Lloyd sell-off set to raise £920m (Related)
Unions plot response over ABN jobs threat (Related)
Journalists in threat over Murdoch bid (Related)
Singh set to bail out of New Look (Related)
Ocado believes growth has priority over profit (Related)
Merrill blasted on Sports Direct crisis (Related)
London des res, fully detached from reality (Related)
A smarter way to hit opera's high notes (Related)
Virgin Media credit rating takes a hit (Related)
Pension watchdog still lacking bite (Related)
College ties that bind Wall Street (Related)
Post strike could cost Royal Mail £300m (Related)
The erstwhile 'supermum' is launching a £250m alternative investment fund, convinced of a seismic shift towards hedging, writes Richard Wachman
Sunday June 3, 2007
The Observer (Related)
Wrong, says Nicola Horlick, who was once dubbed Supermum for juggling a City career with raising a large family. 'Look at the returns on offer. Take hedge funds - Credit Suisse has recorded a five-year cumulative return of over 63 per cent compared with 35.5 per cent from Standard and Poor's 500 Index,' she says. 'Then take private equity funds, which have returned 18.7 per cent net of fees and costs.' compared with the [average] 7.3 per cent returned by the FTSE-100 index over the 10 years to December 2006.'
Horlick is convinced we are about to witness a 'seismic shift' as alternative assets enter the mainstream. It's part of Horlick's marketing push that this week sees her launch a £250m alternative investment fund to be floated on the stock market in July.
The fund will be part of her Bramdean investment group, formed after she left SG Securities four years ago. Horlick has attracted some big names to the fund's board: Brian Larcombe, former boss of venture capital firm 3i, is chairman; other non-execs include Peter Barton, ex-director of merchant bank Robert Fleming, and Michael Buckley, former chief of Allied Irish Bank. Parent company Bramdean Asset Management is chaired by City grandee Sir Derek Higgs.
Horlick's template for potential investors (wealthy individuals or institutions) and their advisers is Yale University's insurance fund, which has allocated two-thirds of its portfolio to alternatives and produced net annualised returns of 16 per cent over a 20-year period.
Despite the negative press which private equity and hedge funds have attracted, Horlick says investors can make a bundle from alternative investments, especially if shrewdly managed funds can separate the wheat from the chaff. 'Hedge funds sometimes take risks, but it is worth remembering that they also smooth returns through market cycles by hedging out market risk.'
She contends that we are on the brink of dramatic change in the way the alternative investment industry is viewed. For evidence, she points to Apcims, the Association of Private Client Investment Managers and Stockbrokers, which is altering its indices to give a weighting to hedge funds and property at the expense of traditional asset classes such as equities.
She says: 'Wealthy individuals have been ahead of the game for years. On average, they have upped their allocations to alternatives from 10 per cent in 2002 to a forecast 22 per cent this year.' UK pension funds have been slower (allocating, on average, a mere 3 per cent), but there have been some high-profile examples of change - the BT pension scheme, managed by Hermes, is a case in point.'
Last September, Hermes said it would be allocating 13 per cent of its scheme to alternative investment products. Elsewhere, the Financial Services Authority is nearing the end of a period of consultation during which it has been considering whether small investors should be allowed access to alternative investment funds.
If Horlick has called it right, she could be on to a good thing - but only if the fund performs, which is never a given. It is probably unfair to review the performance of the six existing Bramdean funds, as they have only been up and running for around 12 months - too short a period to draw a conclusion. Still, one of the most successful was the Bramdean specialist UK equity fund managed by Andy Green, who worked with Horlick at SG, which has delivered a 21 per cent return since inception in October 2005.
But the externally managed UK equity fund marginally underperformed the FTSE All-Share index, while the global bond fund undershot an internally set benchmark by 0.4 per cent. Other funds, however, have performed in line with benchmark City indexes or comfortably exceeded them.
Horlick joined SG Warburg in the 1980s and broke through the notorious glass ceiling that exists for women who seek advancement in the City. Surprisingly, Horlick says that she has never experienced discrimination at work: 'My gender has worked to my advantage because if you are the only woman in a room, it is much easier to make an impression.'
She first caught the public eye in 1997 when, as head of Morgan Grenfell Asset Management, acquired by Germany's Deutsche Bank, she was suspended by her Frankfurt masters, who feared she was about to defect with her London-based team to a rival.
Horlick flew to Germany to demand that she be reinstated, accompanied by a planeload of journalists who learnt that she was a mother of five and called her Supermum or Superwoman, 'depending on the newspaper'. Later, she wrote a book called Can You Have It All? (the subtitle was: 'How To Succeed In A Male World'). The answer appears to be yes. Horlick says that for clever, successful and wealthy City women, it's possible to strike an acceptable work-life balance. 'The real supermums live on council estates and are struggling against the odds to keep life and soul together,' she maintains.
Not that she never gets stressed. With new husband Martin Baker, the author and journalist, she spent last weekend shuttling their various offspring (eight in total) to birthday parties, play dates and sleepovers. 'We don't have help at weekends,' she says. 'I was absolutely shredded.'
Related articles
24.05.2007: Comment: Bubble about to burst? (Related)
23.05.2007: Bid for EMI puts off rival firm (Related)
22.05.2007: BA confirms Iberia bid consortium (Related)
21.05.2007: China buys stake in Blackstone (Related)
21.05.2007: Consortium buys US mobile phone group (Related)
14.05.2007: Cerberus buys Chrysler for 5.5bn (Related)
11.05.2007: How families keep the 'locusts' at bay (Related)
10.05.2007: 3i profits hit £1bn (Related)
09.05.2007: Watchdog 'must clamp down on private equity' (Related)
27.04.2007: Qatari investor in supermarket sweep (Related)
25.04.2007: Sainsbury's shares soar on new bid talk (Related)
25.04.2007: Pessina wins the battle for Boots (Related)
02.04.2007: KKR agrees terms of $26bn US deal (Related)
27.03.2007: Leader: Let there be light (Related)
26.03.2007: Report - PE can be bad for staff (Related)
23.03.2007: Sainsbury's pensions black hole 'up to £3bn' (Related)
13.03.2007: Private equity boss comes out fighting (Related)
08.03.2007: Treasury to investigate PE tax rules (Related)
07.03.2007: PE predicted to spark company collapses (Related)
05.03.2007: Madame Tussauds bought in PE deal (Related)
27.02.2007: PE firms pledge green power from TXU deal (Related)
27.02.2007: Unions seek MPs' support against 'locusts' (Related)
26.02.2007: World's biggest private equity takeover (Related)
24.02.2007: Nils Pratley: Liberation capitalists taking over (Related)
24.02.2007: Very private plutocrats leading new gold rush (Related)
23.02.2007: EU commissioner - firms 'economic saviours' (Related)
15.02.2007: CBI defends private equity against unions (Related)
06.02.2007: Barbarians or benefactors? (Related)
29.01.2007: Record year for private equity (Related)
Guardian Unlimited © Guardian News and Media Limited 2007
No comments:
Post a Comment