‘Victimised for leaving a rich man’: star fund manager’s bitter break-up | Business
He is one of the City of London’s most successful investors, with a fortune estimated at £300m, a luxury yacht and a collection of beautiful homes. But the star fund manager Terry Smith has hit heavy weather in the tropical paradise of Mauritius, from where he runs his business.
Since February, Smith has been locked in an acrimonious public legal battle with his former partner of 13 years. He has launched a barrage of court cases and complaints against Teresa de Freitas, covering at least eight separate matters ranging from alleged embezzlement from a joint account, to disputes over cars and household items. She has retaliated with at least four claims of her own.
The former colleague, who is 21 years his junior, claims she is being “victimised for having left a powerful and rich man”.
Because of the cases against her, De Freitas, 47, has been ordered to surrender her passport and cannot leave the island in the Indian ocean. Her bank accounts have been frozen, her legal bills are mounting, and in April, she was arrested and bailed after Smith, 68, accused her of stealing furniture and other items including a Nespresso coffee machine, a Black & Decker drill and bedsheets.
The legal battles arose after a custody and access dispute about De Freitas’ child who, Smith says, he has treated as his own since birth, and would like to continue a relationship with. De Freitas says she cut ties between her child and Smith because she believed his actions would strip her of all parental rights. She says the pair were engaged in negotiations and making progress when Smith unilaterally ended their discussions and filed legal claims against her.
Smith’s lawyers say although he is not legally obliged to provide financial support to his ex-partner, he has made offers and has continued to provide for the child. De Freitas says she does not consider his financial offer adequate and so the pair – who never married – have not reached agreement over it.
Lawyers for Smith say there is no power imbalance between the parties and that his ex-partner has the means to defend herself. They say the matter is a private family dispute, and that Smith’s preference has always been to reach a settlement.
However, articles in several newspapers and numerous court hearings have pushed the multimillionaire’s fiercely guarded private life into the public domain.
Smith rose from modest beginnings as the son of a lorry driver in London’s east end to become one of the City’s most admired stock pickers, hailed as Britain’s answer to Warren Buffett. Fundsmith, which he founded in 2010, is the UK’s largest stock-focused investment fund and manages £27bn on behalf of clients ranging from small savers to big institutions.
In 2014, Smith and a handful of his staff opened an office on Mauritius, and he and De Freitas relocated there with her child. The couple shared a villa in the grounds of an exclusive luxury golf resort, overlooking the turquoise waters of Tamarin Bay, where dolphins skim the waves and tourists bask on white sands.
The pair met in 2005, at the stockbroker Collins Stewart, where Smith was chief executive and De Freitas was a deputy company secretary. Although he was still married at the time, the couple started a relationship in 2007.
She says she gave up her career to raise her child and help manage their homes which included a Georgian townhouse in Marylebone and a farm in the Cotswolds. Lawyers for Smith say De Freitas did not manage the properties in question.
In April of this year, the villa in Tamarin Bay became the site of a bitter dispute between the couple.
According to various publicly available Mauritian court documents, Smith moved out of their shared home in May 2020 after the couple split. De Freitas eventually left the villa in February, she says after Smith ordered her new boyfriend to move out of the property, which he owned. After finding De Freitas was removing truckloads of items from the villa, Smith alerted the police and De Freitas was briefly taken into custody in early April before being bailed.
De Freitas denies theft, and says she has receipts to prove that some of the items were bought with her own money.
Months earlier, in February, the financier sent an email to De Freitas in which he warned he would pursue her through the courts unless she agreed to let him spend time with her child.
“As a result of your volte face and unwillingness to even respond to proposals I have started taking action,” the message read. “I intend to pursue legal action against you in every respect in whatever jurisdiction you are in indefinitely. Even if I don’t win I will cause you problems for years.” It also stated: “However, I am still prepared to reach agreement with you.”
Smith went on to promise that “all proceedings will stop” if De Freitas gave him legally binding access to her child and a say in their upbringing.
Smith’s lawyers said this is an extract from a longer private email which has been taken out of context, and his preference would be to settle the dispute between himself and De Freitas amicably.
Referring to her former partner in one of the court documents, De Freitas said Smith was now an “enemy”, “someone powerful and extremely wealthy, with money to spare to ruin me in litigation.”
Smith’s lawyers say De Freitas’ comments do not reflect the reality of the situation and are an unbalanced interpretation of events.
According to court filings, Smith has also issued proceedings seeking the return of roughly 14.6m Mauritian rupees (£248,300), money he claims De Freitas stole from a joint account funded entirely from his salary. Smith says he had expected De Freitas to use the funds for “reasonable household and personal expenses”, his lawyers have claimed.
De Freitas asserts that the joint account was in both their names and that the funds belonged to her equally. She placed the bulk of the funds in her account at Fundsmith.
The courts have ordered personal and business bank accounts used by De Freitas to be frozen, at Smith’s request, after the embezzlement allegations.
De Freitas has a total of $1m (£724,000) in savings at Fundsmith, which includes money that Smith alleges she embezzled. She claims Smith is blocking her requests to withdraw the money, and alleges that she is being subjected to an excessive due diligence process conducted by Fundsmith’s agents – including demanding the source of her savings over a 10-year period and details about the origin of funds inherited from her grandmother.
Lawyers for Smith said all checks were standard and delegated by Fundsmith to authorised agents, and that Smith was not involved in them.
“Terry is using his power as head of Fundsmith to block me from the last source of money I had,” De Freitas claimed in a statement to the Guardian.
A partner at Fundsmith also emailed a Mauritian car dealership using his Fundsmith email account on 29 April 2021. He suggested the dealership stop servicing the Toyota that De Freitas had recently seized from Smith, and informed it of the legal dispute over who owned the vehicle.
Smith’s legal team says the Fundsmith partner was correctly notifying the dealership that the vehicle was subject to a legal dispute.
Smith’s lawyers have separately lodged court papers seeking to seize a £69,000 Porsche and asked for 1.6m Mauritian rupees (£27,000) to cover alleged car damage and neglect. De Freitas denies the allegations. She later filed to seize the Toyota and a Jaguar, which Smith also paid for, in response.
In a statement, Smith said: “My primary concern is and has always been for a child whom I have treated as my own since birth over a decade ago. I simply wish to ensure that they are well cared for.”
His lawyers said he remains open to reaching a settlement with De Freitas that includes additional financial compensation for her child and did not want to resort to legal proceedings until all other options were exhausted.