Pa. Pension Sues Madoff-Scarred Fund Of Funds

Feb 17 2009 | 1:26am ET

Last week, one pension fund fired fund of hedge funds shop Austin Capital Management. Now, another is suing it.

One of the Austin, Texas-based firm’s underlying managers was Rye Investment Management. Rye’s parent, Tremont Group Holdings, announced earlier this year that Rye would close after losing essentially all of its assets under management in the Bernard Madoff scandal.

The Pension Fund for Hospital and Health Care Employees-Philadelphia and Vicinity says it lost $700,000 of its $10 million investment with Austin. In the lawsuit, which seeks class-action status, it says Austin “failed to prudently invest the benefit funds’ assets.”

The lawsuit was filed in Philadelphia federal court on Thursday by the law firm of Spector Roseman Kodroff & Willis.

Last week, the Massachusetts Pension Reserves Investment Management Board fired Austin, just four months after hiring the firm. According to MassPRIM, Austin failed to live up to its pledge to visit its underlying managers annually; the pension said it hadn’t visited Bernard L. Madoff Investment Securities since 2005.


In Depth

FINtech Focus: Fundbase Aims To Revolutionize Access To Hedge Funds

Jan 23 2015 | 11:03am ET

Global investment in financial technology—also known as fintech—is booming....

Lifestyle

Looking For A Hedge Fund Manager? Try Davos

Jan 28 2015 | 8:48am ET

Davos, Switzerland seems to have become the hedge fund capital of the world—at...

Guest Contributor

From Switzerland With Love: Some Hard Truths About Central Banks And Risk

Jan 23 2015 | 7:54am ET

In the wake of the Swiss National Bank uncoupling the country’s currency from...

 

Editor's Note