Post-Madoff HF Investors: Some stop, some go, and some start their own funds

Jan 1st, 2009 | Filed under: Hedge Fund Industry Trends, Today's Post | By:
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It’s fair to say that the Madoff situation has added insult to injury for the hedge fund industry and may have prompted some hedge fund investors to finally capitulate.  The New York Post recently wrote:

“Now the worry is that hedge-fund clients will use the scandal as a final reason to pull money from even solid-performing managers. Although Madoff technically did not run a hedge fund, the structure of his $17 billion asset-management operation was similar to some hedge players.

“What’s more, Madoff’s ties with hedge fund of fund mangers, who placed their clients’ money in his advisory business without doing the kind of due diligence that might have uncovered the alleged scheme, has further eroded confidence.”

But wait…

But with many Madoff assets coming from private banks, there may be a schism developing within the ranks of institutional hedge fund investors.  Public pension plans may not be running for the hills, says the WSJ: More…

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  1. It is very unfortunate that a securities scandal of the magnitude of $50 billion should unfold especially during the current troubled times. It is surprising as to how this escaped the regulatory authorities all these years. We are learning with every incident and let us learn how to ensure that this type of scam does not recur in future.

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