Bloomberg News

IKOS’s Ambrosiadou to Appear at Hedge Fund Gala Amid Spy Claims

June 08, 2011

June 9 (Bloomberg) -- IKOS Asset Management Ltd.’s Elena Ambrosiadou has a knack for attracting attention.

Once labeled the U.K.’s highest-paid woman, Ambrosiadou has spent three weeks fending off spying allegations and claims by her estranged husband that he still owns a stake in the $2.5 billion hedge fund. She’ll be hard to miss tonight at one of London’s biggest annual charity events: she has paid for two tables at the Absolute Return for Kids dinner, according to her spokesman. ARK says tables cost a minimum of 100,000 pounds ($164,070) each. She’s also agreed to auction off a week aboard her 289-foot Maltese Falcon, which she bought in 2009 for about $120 million. The yacht, complete with gym and masseuse, typically rents for as much as 378,000 euros ($551,000) a week, according to chartering firm Nigel Burgess Ltd.

The yearlong legal dispute with her husband, a former Goldman Sachs Group Inc. currency strategist and mathematician who helped develop the system that is at the heart of IKOS’s success, has brought the firm the kind of attention that clients don’t relish, say hedge-fund consultants.

“Trading punches in public is going to turn off a lot of investors,” said John Godden, chief executive officer of London-based hedge fund consulting firm IGS Group.

That hasn’t happened, according to Phil Hall, a spokesman for Ambrosiadou. No clients of Cyprus-based IKOS have submitted redemption requests in the past three weeks and the firm has actually had net inflows, he said in a statement.

Coward Departs

“We have close relationships with our investors on an on- going business,” Hall said yesterday. Ambrosiadou, 52, and Martin Coward, her husband, declined to comment.

Ambrosiadou, IKOS’s chief executive officer, and Coward, who left IKOS in December 2009, and at least two other former employees have been suing each other. The disputes, laid out in press releases and court documents in the U.K., include allegations of surveillance specialists bugging homes and statements from IKOS that Coward is using the media to damage the business.

Clients have had little to complain about for much of the past two years. IKOS runs so-called managed futures funds, which rely on computer programs to spot trends in the values of commodities, currencies, interest rates and bonds.

The firm’s IKOS FX Fund produced investment returns of 26 percent in 2010 and 18 percent in 2009, according to data compiled by Bloomberg. Its IKOS Futures Fund gained 25 percent in 2010 and 2.4 percent in 2009.

Strong Returns

Similar funds rose 9.3 percent on average in 2010 and lost 4.3 percent in 2009, according to an index from Paris-based Newedge Group.

Robert Savage, who sits on the IKOS board, said the firm’s strong returns since the departure of Coward, the company’s former chief investment officer, prove that Ambrosiadou is capable of running the funds successfully without him. “It’s foolhardy to think any organization managing money can be on auto pilot,” he said. “You still need human beings watching and intervening in the process. That’s what the CEO of a quantitative hedge fund should be doing.”

May was less kind to IKOS. A rapid selloff in oil and metal markets came too quickly for most managed futures funds to catch the shift in prices.

The IKOS FX Fund declined 9.5 percent last month, its worst performance since at least 2008, according to Bloomberg data. The IKOS Futures Fund fell 8 percent. Managed futures funds on average declined 4.6 percent in May, according to Newedge. Year to date the IKOS FX Fund is up 6.3 percent, according to Bloomberg data. The IKOS Futures Fund rose 3.4 percent.

Spying Claims

May is also when media organizations reported allegations from a former fund manager about spying. The employee said Ambrosiadou hired a woman trained in surveillance and counter- terrorism to determine whether he was planning to leave IKOS to start a new hedge with Coward, according to a July 2010 lawsuit that’s since been resolved.

IKOS responded in a May 24 press statement, saying it “lawfully” investigated Coward and “a number of former employees” because of concern over property theft. Michael Willcocks, the director of external relations at IKOS, sent a letter to the firm’s investors the following day that said all steps taken by the company were done to protect “its trade secrets.” Willcocks added that Coward has no stake in IKOS.

“Investors may start to ask themselves how much time is being taken away from the core activities of the firm,” said Max Ferri, who performs due diligence of hedge funds for Laven Partners, a London-based consultant.

Investors ‘Very Pleased’

Savage, the IKOS director, said he heard no concerns last week when he held routine meetings in London and New York with more than 150 existing and potential investors of the firm.

“They are happy with IKOS management and very pleased with the returns,” he said. “The comments I have heard about the bad press suggest this is more of an annoyance for investors as they feel they have to justify what seems obvious to them: IKOS is a trusted and worthy asset manager.”

The lawsuits and media coverage caused Ambrosiadou, “extreme, personal pain” that prompted her to briefly announce she was pulling out of the ARK dinner, according to a May 23 e- mail she sent to the organization. She also rescinded her offer to auction off use of the Maltese Falcon.

“There are those who find satisfaction in misrepresenting me,” she wrote. “They use the press, knowing that it causes damage to my family and my firm, hoping to achieve benefits which they cannot achieve through the right and just court process.”

Ambrosiadou has since changed her mind. She will attend the event and diners will bid on her boat, Hall said. Prince William, who will attend with his new wife, Catherine Middleton, will be the keynote speaker.

--With assistance from Stelios Orphanides in Athens. Editors: Steve Bailey, Edward Evans.

To contact the reporters responsible for this story: Jesse Westbrook in London at jwestbrook1@bloomberg.net; Stephanie Baker in London at stebaker@bloomberg.net

To contact the editor responsible for this story: Edward Evans at eevans3@bloomberg.net


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