Credit Suisse Index Socked By Madoff-Hit Funds

Dec 16 2008 | 3:56am ET

Losses taken by two hedge funds that invested with accused Ponzi schemer Bernard Madoff have translated into big losses for a hedge fund index.

The Credit Suisse Index Co. yesterday updated its November numbers in light of the Madoff scandal, which could total as much as $50 billion. The company wrote down the values of the Fairfield Sentry and Kingate Global hedge funds, which had $7.5 billion and $2.8 billion, respectively, invested with Bernard L. Madoff Investment Securities.

The Credit Suisse/Tremont Hedge Fund Index actually lost 4.15% last month, rather than the 0.71% estimated loss reported last week. The write-downs pushed the index’s year-to-date loss down to 19.04% from 16.14%.

“The unexpected events around Kingate Global/Fairfield Sentry have had material effects on the performance of the Equity Market Neutral sector, and therefore have also impacted the broad benchmark index,” CS Index Co. President Oliver Schupp said. “Considering the information we now have concerning Kingate Global/Fairfield Sentry, assets under management for the funds have been marked down to zero for November to reflect the news received last week.”

Indeed, the losses at Kingate and Fairfield Greenwich turned CS’ equity-market neutral subindex from one of last month’s best performers into its worst. The benchmark is now estimated to have lost 40.45% in November (last week’s estimate had it up 0.85%), and 40.56% year-to-date.


In Depth

GSAM’s Papagiannis on Liquid Alternatives

May 25 2016 | 5:07pm ET

The popularity of liquid alternatives strategies has blossomed in recent years,...

Lifestyle

From Modern Trader: Stephen Curry is a Black Swan

May 18 2016 | 7:43pm ET

What do the rise of the Internet, the sinking of the Titanic, 9/11, and Stephen...

Guest Contributor

LendingClub and the Question of Internal Hedge Funds

May 19 2016 | 8:42pm ET

Peer-to-peer lending platform LendingClub Corp. has been in the news since the firm...