Madoff Fraud Shifts Focus to Concerns About Hedge Funds

The followings article by Richard M. Todd was recently published in the Denver Business Journal, Volume 60, Number 42, March 27 - April 2, 2009, (Denver Business Journal).

In 2008, hedge funds didn’t protect investors as many had expected. The CS/Tremont Hedge Fund Index, which included Bernie Madoff’s fraud, was down 19.07 percent for the year.

While some of the disappointment was attributed to the financial crisis, investors’ confidence also has been shaken by the depth and significance of Madoff’s fraud. Although Madoff managed separate accounts, his strategies were distributed primarily by feeder funds structured as hedge-fund partnerships.

Many people have written off the hedge-fund business. However, we think otherwise, and believe that solid, risk-adjusted returns should be in store for diversified hedge fund investors...

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