At the height of the financial uncertainty in Britain at the beginning of last year, HSBC pulled the rug from under the owners of Gravetye Manor, a country house hotel in Sussex close to Gatwick airport. What would become of the former home and gardens of William Robinson, the horticulturist and writer who died in 1935? The venue had once catered for all the best lunches and parties for miles around.
There was a hotel group, von Essen, interested in adding the property to its portfolio, but perhaps it's just as well for all concerned that it was unsuccessful - the company has just gone into administration and all its properties, from Cliveden to the Royal Crescent Hotel in Bath, have been put up for sale by Christie and Co.
The successful bidder was Jeremy Hosking, a City financier in his 50s who, after gaining a degree at Cambridge University, went to work in London, Hong Kong and San Francisco. In 1986, together with two partners, he set up Marathon Asset Management. Now the firm employs about 70 staff and has an estimated US$50 billion (Dh183.66bn) under management. Mr Hosking was ranked number 333 on The Sunday Times rich list in 2009, with a net worth of about £170 million (Dh999.67m).
So, apart from being a hopeless romantic, why the interest in Gravetye Manor, a boutique hotel with 17 bedrooms, a croquet lawn, magnificent flower beds and 1,000 acres of woodland?
For anyone of my generation that grew up around this area, there is an emotional interest in Gravetye. I was brought here on high days and holidays or if one had distinguished oneself at A levels.
But why buy it?
It was an emotional attachment. Anyone who has ever stayed here is part of the Gravetye community. On January 2 2010 I knew it had gone into receivership because I was staying here. Then I heard about other bids for the place and was told I was free to bid. The administrators sent in a company with an Orwellian name, Licensed Solutions, to run the place. Cost-cutting was accelerated. My colleague called the administrators and we put in a bid. We entered this auction business. The auction is open and the administrators have a strong obligation towards the creditors. It is very strange buying a business that is in receivership.
The problem with this process is not that it was rigged, but the structure had not caught up with the intention. They had a contract with von Essen and every time we made a bid, they went back to von Essen and they raised their bid by £75,000.
Finally we phoned PricewaterhouseCoopers and told them we were serious and wanted to make a bid, but told them that we would not tell them the bid unless they would suspend the auction for a week to allow us to exchange. Then the obligation went the other way, they needed to find what our bid was.
We bid just over £4.5m and exchanged at 15 minutes past deadline after a long night of pizza boxes, a classic investment banking evening that was really very boring although there was an illusion of excitement.
As well as the purchase price, how much additional investment was needed?
We knew the place needed a lot of investment, although they were quite good at hiding and papering over what was needed. We then discovered that about £2m was needed to fix the infrastructure, drains, boilers and chimneys.
We decided this winter to do the infrastructure work and we have redecorated the manor house wing.
What do you do in your day job?
The newspapers insist we are a hedge fund, but we are a traditional pension fund manager such as Schroders. Our business is 99 per cent institutional. We manage the money out of one office in central London, but we have kept a boutique structure. Our idea in 1986 was that if you were investing around the world you did not need people all around the world gathering information. It may have been precocious at the time but very obvious in hindsight that the information would come to us. We started with three men in the room and still have only eight fund managers, it's a very small structure for the amount we are managing. We have two main products: global equities; and international equities. International equities are global equities for Americans. Americans use the stamp album model of investing. British stamps at the front, foreign muck at the back. You need to reconfigure the world to suit their view of a world without America. After 25 years we have one and a half products. I hope it stays that way. If you decide that Colombian banks are the best things in the world you want as many of them in your fund as possible.
And where are the best investment places at the moment?
I'm still bullish on bank shares, although not everybody shares my view at the moment.
So will you bid for the von Essen portfolio?
I wouldn't have bought another hotel. This is a personal portfolio diversification. We have more than enough challenges here, commercially very difficult. The market is dead for country house hotels.