If you could strip out the sex, drugs and the technical details of greenmailing and short-selling, the story of Florian Homm would make an ideal Sunday morning sermon about the spiritual dangers of coveting great wealth.
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Not a fairy light in sight Take one start-up, add expertise and grow with care Armstrong resigns from Livestrong charity Disabled Theater, Centre Pompidou, Paris Case study: fresh PwC apprentice scheme Homm once had all a hedge-fund manager of the past two decades could want. A few hundred million dollars, houses, boats, an adoring wife and children, and a fund management company that churned out money in spite of itself.
But by 2007 it had all gone wrong. His company was a shambles. His wife had left him and taken their children and he had shacked up with a 27-year-old Russian lingerie model.
On September 18 of that year, he staggered aboard his private jet in Majorca, with USD 500,000 in cash stashed in his underwear, humidor and briefcase, and millions more stashed in accounts around the world, and flew into retirement in Colombia, before being forced to go into hiding.
His sudden abandonment of his USD 3.25-billion fund, Absolute Capital Management Holdings , was an early sign of the financial turbulence to follow. Investors were furious and investigators across Europe and the US wanted to know why a man like Homm was chucking it all in. It was alleged he had misused investors' money to pump up penny stocks to his own advantage. Last year, the US Securities and Exchange Commission filed a civil suit at the District Court in Los Angeles but the civil nature of the action means he is not considered a fugitive.
In Germany, before his disappearance, Homm had become a living caricature of capitalist excess, a cigar-puffing example of what politicians called "locusts"; investors who came in and tore apart companies. His sudden departure stank.
Five years on, he has re-emerged with a book,
Rogue Financier: The Adventures of an Estranged Capitalist, explaining himself. "I'm very serious these days," he says in a telephone interview. "I'm a much more normal person than I was."
His book is ribald, self-aggrandising, despicable at times and at others very funny. It is poorly organised, hard to follow and so outlandish it strains credulity. But it also has the makings of a classic. Homm lived right on the line between light and dark in the financial world and paints a picture of that world few would dare imagine.
Homm grew up in Germany and moved to the US first as a strapping and talented basketball player. The possibilities of American life entranced him and he succeeded in being admitted to Harvard and then Harvard Business School.
After receiving his MBA, he worked at Fidelity before striking out on his own at the age of 30. He founded Value Management and Research in the billiards room of his Majorcan villa, naming it after Fidelity Management and Research. As he writes: "It sounded virtuous, sincere, professional and trustworthy. In short, all the things I was not."
What followed were nearly two decades of harum-scarum financial adventures, ranging from the acquisition and restructuring of Borussia Dortmund, the German football club, to buying Penthouse Media, taking on organised crime in the short selling business, then riding the hedge fund bull market of the early 2000s. As the threat of lawsuits piled up, he sought immunity from prosecution by taking a post as a Liberian diplomat at Unesco.
Today, Homm has a fraction of his former fortune - about USD 10 million, he says. He lost the last great chunk of it after his European trustee invested heavily with Bernard Madoff. At various times his accounts have been frozen by investigators. He has received death threats, which he believes come from former investors and financial associates. When he calls, he won't say where he is calling from. But for much of the past few years he has lived in Latin America.
"I'd like to sit in a cafe and no longer have to sit with my back against a wall," he says. "The whole point about going out and being open about all this is that it gives me the chance to be a good father - better late than never." He adds that he could have chosen the "dark side" and accepted offers to re-enter finance managing private money. "But I have chosen the bright side."
It took several years of self-imposed exile, he says, to get to this point. "All my life I was consistently driven, narrow-minded and vain."
After disappearing in 2007, he continued to live in luxury as he tried to calm his mind and body down. "But by the third year, I realised I was running on empty. I was writing things down like the 200 activities that feed your soul, the 200 activities that empty your soul."
Then, in the fourth year, his fortune fast dwindling, he met a group of men, including former Latin American revolutionaries, who bought him a rosary and invited him to read the Bible. "They called me the 'antichrist of finance'," he says. "I had a choice then to become a major consigliere to wealthy individuals or to try to become a father, a good Christian, a man who cares about his fellow citizens. These guys brought me along."
He met Howard Marks, the former British drug smuggler, and was struck by how he had discovered his purpose not through religion but by "distancing himself from his ego and vanity. I wanted to make the same transition. From taking to giving. From blind ambition to purpose. From self-pity to laughing at yourself. This took a while."
Homm's autobiography is shot through with entertaining assaults on the financial industry. He believes in the principles of value investing but finds those who practise it excruciating company. "They barely have a pulse and are neither greedy nor fearful."
He mocks institutional investors for wasting their time listening to the lies of corporate executives when they would be better off hiring private investigators to discover the reality of their investment targets. And he defends the work of short sellers. "I identified overvalued, frequently fraudulent, heavily indebted companies that were destroying themselves. They had only themselves to blame. At worst, I was the predictor of disaster, at times the first messenger of death."
Homm's says his greatest regret is what he lost emotionally during his years in finance. "Whether it's half a billion, a billion or two billion, you work a hundred hours a week for 20 years to make it and I've lived that life. Boring! You are selling your soul, you're going to walk over corpses, you are going to sub-optimise the right side of your brain, the emotional brain, and you're probably going to incur damage at the family level. My biggest remorse was I really lost 10 years. I was loaded when I was 40. I missed my kids growing up. I looked at myself and thought 'you are a total fool'."
Any royalties from his book, he says, are going to the Liberia Renaissance Foundation to benefit schoolchildren. And he is also deploying his managerial and financial expertise via a company to improve the delivery of medications in the developing world. We should believe in his transformation, he says, because: "I've always been in people's faces. I've never made any bones about what I did. It's much too complicated to bluff."
His story should be all the more credible, he reckons, because of its improbability. "If anyone told me before 2009-10 that I'd ever pray daily, wear a rosary around my neck, that I'd go regularly to church, I'd have done a 10 to 1 bet for USD 100,000. Impossible. But strange things can happen."
