Friday, 25 July 2014
Last updated 2 hours ago
Feb 17 2009 | 1:27am ET
The Man Group’s fund of hedge funds arm has learned its message from the Bernard Madoff scandal.
RMF Investment Management, which lost US$360 million in the alleged US$50 billion Ponzi scheme, will now insist on face-to-face meetings with all decision makers who work on the funds it invests with, Reuters reports. The division reviewed its investment process following Madoff’s arrest in December.
RMF’s Four Seasons Strategies Fund, like the firm’s other products, had previously insisted only on meetings and due diligence on the managers of a fund it invested with, but not necessarily those funds’ underlying managers.
Thus, RMF had met with Tremont Group Holding’s Rye Investment Management, but not with Bernard L. Madoff Investment Securities, with whom Rye had invested substantially all of its assets under management, since 2001. RMF had invested in the Rye Select Broad Market XL Portfolio.
Were it making that investment now, RMF would require a meeting with Madoff Securities, according to Standard & Poor’s. S&P rates the Four Seasons Fund; fellow ratings agency Fitch Ratings last week downgraded four of the fund’s classes due to the “severity of losses and marked reduction in underlying fund liquidity.”
Man has previously announced that it would take legal action over its Madoff exposure.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…