Hedge Fund Madam Says She Supplied Prostitutes To Former IMF Chief

May 19 2011 | 1:10pm ET

Where there's a sex scandal, there's a good chance you'll find former hedge fund executive Kristin Davis.

The one-time Brookhaven Capital Management vice president who gave up alternative investments for a career as a prostitution maven—she was jailed for her activities in 2008, helping bring down then-New York Gov. Eliot Spitzer—says she counted former International Monetary Fund chief Dominique Strauss-Kahn as a customer.

"He was a client of my agency," Davis told the Daily Telegraph of Strauss-Kahn, who resigned from the IMF yesterday from his jail cell, where he is being held on charges of sexually assaulting a Manhattan hotel housekeeper.

"When men abuse women, I'm no longer going to protect their identities," Davis added.

Which is not to say that Davis was unaware of Strauss-Kahn's allegedly violent impulses.

"He wanted an 'All-American girl,' with a fresh face, from the Midwest," she said. "A girl in January 2006 complained he was rough and angry, and said she didn't want to see him again."

Later that year, Davis said a Brazilian prostitute said he was "rough" and urged Davis "not to send any new girls to him."

Davis said Strauss-Kahn, who has denied the attempted rape charges against him, called her directly and paid $1,200 for each two-hour session in hotel rooms.

Strauss-Kahn was due back in court today in an effort to be freed on bail. Meanwhile, a top Brazilian hedge fund manager is being mooted as a possible successor to Strauss-Kahn at the Washington, D.C.-based IMF.

Arminio Fraga is in the running for the post, Reuters reports, if only from some distance. The former Soros Fund Management managing director last year sold his US$6 billion hedge fund, Gávea Investimentos, to JPMorgan Chase.

Fraga's candidacy is considered a longshot. For one thing, when he sold Gávea, for as much as US$800 million, he pledged to stay with the hedge fund for at least five years. But, more seriously, European leaders are insisting that the post, traditionally held by a European, go to one of their own. And even if they could be persuaded to give the post to someone from the developing world, the continent's prejudice against hedge funds would certainly play against Fraga.

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