Henry and stock picker push equity fund

By Deborah Hill Cone

Friday 24th September 2004 1 Comment

Winston Peters' winebox lawyer Brian Henry has joined up with self-styled stock picker Alan Goldman, a former director of a company linked to collapsed boiler room operation Bergers Securities, to launch a New Zealand-based US equity fund.

US50 Fund Limited filed a prospectus at the Companies Office in July offering perpetual preference shares in a new fund, which will invest in 50 listed US stocks.

The document says the fund is being promoted by Mr Henry and fellow Auckland lawyer Dennis Gates, although it credits the model for the investment vehicle to Goldman.

Its "system" presumably the fund's 11 herbs and spices is owned by a company called T51Design Ltd, owned by Henry, Goldman and his business partner Kenneth Fox.

The point of difference of the fund is its computer programme which crunches the numbers on stocks listed on the New York stock exchange, the Nasdaq and the American Exchange.

Henry, who specialises in technology law, said he became involved because Goldman asked for his help in licensing the computerised system he had developed.

But Henry was so impressed with the product, which allows investors to click on a website and check their investment every day, he became involved in marketing it.

The prospectus cites the performance of the US50 "notional" fund which shows it went up by 83% between January 2003 and June this year while the S&P500 went up 24%.

"When other funds drop we drop slower and when it goes up we go up faster," Henry said.

But investment sources pointed out the market had bottomed out in March last year so it was easy to show a big increase in value since then.

"If these people could really make a return of 83% when the market does 24%, they wouldn't be working here. They would be going to one of the big investment houses in the US and they would be throwing money at them," a fund manager said.

The fund is offering three types of perpetual preference shares maxi, midi and mini with different dates at which they may be redeemed. Its prospectus says it aims to raise $27 million by April next year, although Goldman admitted the fund had raised "only about $20,000" so far.

Expatriate South African Goldman said they were trying to register the fund with the South African Financial Services Board and hoped to promote it to investors in his home country.

Goldman gives a colourful account of his own background as the son of a former mayor of Durban. He says he lectured at Cambridge University's Caius College, traded commodities in Germany, spent time in Israel and is writing a PhD in the German language on Jewish mysticism.

The US50 Fund offering has yet to get off the ground but already it has a chequered history. A year ago the Independent reported Bergers had already tried to peddle Goldman's fund idea around the market and that Goldman was furious about it.

But Goldman said he was only marginally involved in Bergers as a director of a previous company and his nephew Benjamin Mauerberger was the key figure.

The firm collapsed into liquidation in May last year but investors got their $500,000 back, thanks to liquidator Anthony McCullagh and a deal between Mauerberger, another former director Clinton Lee Braude, and the Securities Commission.

Bergers Securities had been phone-selling what were known as "Reg-S" shares, US stocks which were said to bypass the normal scrutiny of the US regulators as long as they were sold outside the US to non-Americans.

Comments from our readers

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