Tuesday, 31 May 2016
Last updated 3 days ago
Jan 27 2012 | 9:23am ET
A Jersey City, N.J.-based hedge fund firm has allegedly been bilked by one of its own. According to sources familiar with the Osiris Fund, partner Peter Zuck has fled with investors’ money and the fund is now defunct.
Reached by phone, Michael Spak, CEO of Osiris Investments, which manages the fund, declined to comment due to ongoing investigations. But according to one source, it was Spak who first reported the 61-year-old Zuck to the FBI.
The Osiris Fund launched in early 2009 with approximately $6 million from the four founding partners and their families, and in December of that year it opened to outside investors. At that time, Spak told FINalternatives, “The fund is a ‘hedged’ fund in the truest sense of the word. Our team’s objective is to immunize the volatility of the portfolio which in turn allows us to produce better than average returns consistently.”
Unlike most hedge funds which have a minimum investment level of $1 million or more, the minimum investment for the Osiris Fund was just $150,000, making it accessible to smaller investors.
“When we decided to go against the grain of the hedge fund industry and create a fund for all, not just the millionaire and billionaire clients, I knew in my head and my heart it was the right business model,” Spak said in January 2010.
According to Bloomberg data from April 2010, the fund ranked third out of 3,527 top performing global hedge funds.
As of now, no investor money has been recovered, and Zuck has vanished. As for the three other founding partners, one left the firm in 2010 and the two remaining ones—including Spak—are reportedly cooperating fully with authorities.
A background check on Zuck reveals that beginning in 1995 he spent over a year in a New Jersey prison after being found guilty of "misconduct by a corporate official."