D.E. Shaw To Appoint Independent Administrators

Mar 2 2009 | 10:59am ET

Hedge funds don’t usually concern themselves with existential questions, but in the wake of the Bernard Madoff scandal and a slew of smaller alleged frauds, D.E. Shaw Group is doing just that.

The New York-based firm says it will appoint independent administrators for its funds, and that one of their jobs will be to ensure that its investments actually exist, the Financial Times reports. Investors, especially of the institutional variety, have clamored for U.S.-based hedge funds to hire independent administrators in the wake of Madoff’s arrest, with some threatening to pull their money from firms that fail to do so.

“Up until recently, valuation was the issue investors in alternatives were most focused on,” D.E. Shaw spokesman Darcy Bradbury told the FT. “Now, we’re going beyond that and looking at third-party administration arrangements where an administrator would also substantiate positions and cash balances.”

The court-appointed receiver for Madoff’s firm said recently that is appears that Madoff, accused of defrauding investors of $50 billion, never invested a dime in what authorities call the largest Ponzi scheme in history.


In Depth

bfinance: Fees Falling Across Asset Classes, Yet Overall Investor Costs Still Climbing

May 16 2017 | 9:53pm ET

Despite unprecedented attention on fees, new research from investment consultancy...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Risk-Based Compliance: Why Oversight Of Outsourcing Is Critical

May 10 2017 | 7:02pm ET

Compliance is notoriously one of the trickiest middle office functions for funds...

 

From the current issue of