Lars Windhorst: A business wunderkind falls from grace
German financier Lars Windhorst has a history of making – and losing – money. But this time, he's out to prove his doubters wrong.
The financier Lars Windhorst came to London in 2009 in dire need of redemption following a series of "spectacular flameouts" in his native Germany, says the Financial Times. He then embarked on a major City charm offensive, throwing lavish parties at which he courted billionaires and asset managers, including L&G and Fidelity. Windhorst talked big, citing KKR and Blackstone as models for his investment firm, Sapinda. But questions about the firm's finances have been circulating for years and have now come to a head. Following a €66m lawsuit brought by an investor, court-appointed officers have seized Windhorst's private jet, art collection and wine cellar. It's a humiliating new chapter in an extraordinary career.
The action, brought by a Belize-based outfit, Romanello Financial, is one of six separate civil lawsuits involving nearly €220m that have been filed against Windhorst and his Sapinda companies since March last year. Some have since been settled; all allege "failures to honour sale and purchase agreements relating to bonds or shares in Sapinda". A 2015 FT report revealed "a circular flow of money" between Windhorst's various offshore vehicles and the business, involving complex convertible bonds, put options and loans.
It's a fall from grace for the wunderkind, says Bloomberg. Raised in Rahden, northern Germany, Windhorst began his career at 14, trading computer parts out of the family garage. The operation went global when, at 15, he flew to China to source components. "Three years later he was running a business with almost 100 employees and had halted his formal education." By the mid-1990s, when Windhorst's talents caught the imagination of the-then chancellor, Helmut Kohl, his outfit was turning over DM250m annually and had interests in property and advertising, says The Independent. The "prodigy phase" of Windhorst's career ended when the dotcom bubble burst. By 2003 he had filed for personal bankruptcy.
A period in the wilderness followed as he repeatedly tried and failed to get new businesses off the ground. When the financial crisis wiped out his German investment firm, Windhorst was not only insolvent again but also in trouble with the law: he received a one-year suspended prison sentence for embezzling about €800,000. His move to London turned out to be a good one, says the FT. In a world of low interest rates, many investors were "willing to talk to anyone with an interesting idea", even if it came from "a smooth-talking German with a history of losing money". Despite his ups and downs, Windhorst had built up considerable goodwill: he often refers to investors as "friends and family" and made a point of reimbursing early investors after previous bankruptcies.
Last week a new vehicle linked to Windhorst issued €500m in bonds with the intention of helping him settle outstanding lawsuits and repay existing debts. "The thinking is that, if you give him three years, maybe his operating companies will be profitable, while if you force him to repay everything now you could be fighting over scraps," a source tells the FT. Windhorst is it seems, still hoping to prove the sceptics wrong.