Two Former Bankers Square Off Over Birth of a London Hedge Fund
(Bloomberg) -- A former Deutsche Bank AG trader faces a London trial this week over claims he cut out a one-time business partner who introduced him to key clients for his new hedge fund.
Anish Mathur, the founder of Astra Asset Management, is accused in the lawsuit of halting payments to Saleem Siddiqi, who says he and his wife helped forge early links between Mathur and investors. Mathur argues their agreement didn’t allow for further fees and that Siddiqi made critical remarks at a hedge fund conference.
The trial will focus on the events leading up to the founding of the London hedge fund as well as the increasingly bitter fallout stemming from the dispute. The judge will also consider a rare claim of slander linked to allegations that a conversation by a hotel pool triggered withdrawals from the fund.
When Mathur left Deutsche Bank’s Winchester Capital unit to set up his own structured credit business in the fall of 2012, his focus was on complex credit derivatives deemed too toxic for investment banks to continue to hold after the financial crash.
“Mathur knew, from his expertise gained at Deutsche Bank, which were the good ones and where they could be found,” Siddiqi’s lawyer, Peter Knox, said in a filing for the trial Tuesday. “This presented a very good opportunity to buy cheap, hold for a few years, and then sell.”
Siddiqi, himself a former banker at Merrill Lynch, says he and his wife, Alexandra Galligan, brought in investors including LGT Capital Partners, an investment fund ultimately owned by Liechtenstein’s royal family. His role went beyond the introductions including discussing strategy with Mathur, he says, and his firm is entitled to at least 10 million pounds ($13.9 million) in fees.
Both sides agree the relationship became increasingly contentious in 2016, three years after the first investments, when Mathur told Siddiqi and Galligan that the management fees would end. Siddiqi and Galligan were concerned Mathur was “emotionally volatile,” according to their filing.
Astra said the couple were “mistaken” in believing they would earn performance fees when the initial investment period expired.
Shortly afterwards, Astra alleges that Siddiqi disparaged Mathur in front of a representative of LGT at a meeting by the pool of a Rome hotel in June, during a hedge fund conference.
Siddiqi said that Astra was a “sinking ship” and Mathur was a “one-trick pony,” or words to that effect, Astra said in its legal filing. Siddiqi, Astra argues, wanted to trigger withdrawals that might lead to “the premature payment of performance fees.”
But the former banker has insisted the allegations were false and were only brought after he’d raised his own concerns about the fees and that the defamation claim was an “abuse of process.” Rather than criticize Mathur, “he was keen not to rock the boat,” Siddiqi’s lawyer said.
At the trial, the LGT analyst isn’t giving evidence as a witness.
Astra said that LGT did seek to redeem part of their investments and that the fund then lost the chances to earn fees on the sums withdrawn.
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