Funds Hub

Money managers under the microscope

Madoff shadow looms over UBP

August 6, 2009

MadoffWhile much of the hedge fund industry starts to draw breath and consider better times ahead, those firms tainted by the Bernard Madoff ponzi scheme continue to suffer.

UBP — which had exposure of about 1 billion Swiss francs to Madoff’s firm — on Wednesday said hedge fund assets had slumped by 20 billion Swiss francs in the first half and are now more than half the level achieved at the peak in June 2008. To be fair, the private bank isn’t giving up easily and has hired in new managers to liven up its offering.

In the UK, the Bramdean investment firm managed by Nicola Horlick is still battling to resolve a row over its future strategy sparked by a 10 percent exposure to Madoff.

But their woes contrast sharply with the experience at other players, particular U.S. firms reporting the same day.

Listed hedge fund group Fortress Investment reported surprisingly strong revenues and gave a bullish forecast of future demand, while Citadel felt chipper enough to pay back some of the money that was locked up when redemption requests flooded in during the financial crisis. It plans another payout at the end of the year.

Och-Ziff on Tuesday, meanwhile,  reported lower-than-expected quarterly but touted strong gains at its funds which it expects to attract new assets in the months ahead as hedge funds recover — at least those not weighed down too heavily by association with a certain resident of the Butner Federal Correctional Complex in North Carolina.

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