Madoff Feeders Major Casualties Among Dead And Dying Hedge Funds

Mar 19 2009 | 2:48am ET

The Bernard Madoff scandal was one of the biggest disasters to ever strike the hedge fund industry, a fact confirmed by new research on hedge fund liquidations.

Fully one-fifth of all North American hedge funds to begin liquidations last year were Madoff feeder funds, according to HedgeFund Intelligence. Three of the 10 largest hedge funds to go under last year were Madoff feeders: Fairfield Greenwich Group’s Fairfield Sentry Fund, J. Ezra Merkin’s Gabriel Capital and Ascot Partners, and the Tremont Group’s Rye Investment Management fund of hedge funds business.

All told, the feeder funds linked to the $50 billion Ponzi scheme perpetrated by Madoff purported to manage $16 billion.

Still, the Madoff scandal was not the only factor that felled hedge funds in record number last year. According to HFI, a whopping 200 hedge fund families began liquidating last year, a fourfold increase from 2007. Those funds managed a total of $84 billion.


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