My delayed Nicola Horlick post

Oh dear

I deliberately did not post on Nicola Horlick and her investment in Bernie Madoff’s giant ponzi scheme because I thought I might be transgressing on some gender issues.  I wrote the post – and I never put it up.  

But this blatant piece of garbage self defence has spurred me to action.  She thinks that we are being sexist singling her out.  

I will just put up the original post.  You decide...

Your chance to see Superwoman naked

Warren Buffett famously said that when the tide goes out you can see who is swimming naked. As a surf lifesaver I can tell you that Buffett’s pithy remark is not literally true. And nor is the title of this post – so the perverted can stop reading now.

Ok, so you are still with me. I didn’t think too many of my readers would admit their perversion…

Anyway Nicola Horlick is London’s famous superwoman – an attractive articulate woman who has juggled several high profile jobs, five children and a messy divorce all in the glare of London’s insatiable gossip press. When I was younger I looked at my career and wondered how she did it.  I also wondered how she generated all those headlines.

Ms Horlick has now started her own business – a fund-of-funds known as Bramdean Asset Management. Bramdean and Nicola of course know their job – as their website says:

Robust and thorough due diligence is at the heart of our firm's investment process. Our detailed manager monitoring programme ensures that our clients' investments are subject to on-going and effective governance.

Good – we got that. And it is not boilerplate. Due diligence is actually not that hard a lot of the time. And if you don’t do it you will wind up with a Greg Duran or a Bernie Madoff.

Pregnant pause…

What… Nicola did get a Bernie Madoff – and for almost 10 percent of her funds under management. 

This can’t be happening. She is superwoman after all. After all there were warning bells and Jim Vos nailed it.

Now here is the question: does a fund-of-funds which correctly lists due diligence as the core function deserve to exist if it invested with Bernie Madoff?

I think not.

Superwoman is metaphorically naked.

I think Nicola would have preferred run literally naked through Piccadilly Circus than have this happen to her and her clients. It would have helped News Corp sell papers too.

As for her business. It is over.   She tied the rope around her neck when she invested with Madoff. And the hangman has pulled the lever. For the junior staff – it is time to pack up shop and find a real career.

The Bramdean website says that it is uncertain as to what the value of Madoff funds are. Who are they kidding – Naked Shorts has that answer.

As for the value of a fund-of-funds business with Madoff in the portfolio? Well that is fast approaching the same answer.

John Hempton

One correction - the loss to Bernie Madoff was in the alternatives portfolio only.  In otherwords almost 10% of the money allowed to be invested in hedge funds was invested with Madoff.