Fortitude Capital didn’t lose any money in the Bernard Madoff Ponzi scheme, but that giant fraud is still haunting the Australian hedge fund shop.
Fortitude’s assets under management have fallen by half since last year, as investors burned by Madoff yanked their money from the firm. And that’s despite the fact that Fortitude has posted consistently positive returns, even amidst the market carnage of last year.
“It’s frustrating,” John Corr, managing director, told Bloomberg News. “We thought good returns would generate attention, and history shows that they are somewhat irrelevant, which makes you somewhat skeptical.”
To wit: The firm’s flagship Absolute Return Trust has seen its assets under management more than halve since October, dropping from A$180 million to A$85 million. Meanwhile, Fortitude’s new Equity Income Fund has raised just half of the A$10 million it was seeking. Which is to say nothing of the A$500 million Corr hopes to eventually raise for each fund.
“We were happy to try to generate returns,” he told Bloomberg. “We weren’t worried about who invested and how to find them. We thought people would find us, and that was naïve.”