Wednesday, December 17, 2008

Man Investments Exposure to Madoff

A lot of visitors to this blog have been searching for various combinations of Madoff and Man Investments and its products. It turns out there is a connection between the two. Man's RMF division had 1.5% of assets invested with Madoff. 40% of our investment in the Man OM-IP 3Eclipse Fund is invested in the RMF Dynamic Program. So we lost about $A50 in the Madoff debacle.

AS is typical of Australian PDS's (prospectuses), all that is stated in the document is that the fund invests in 40 hedge funds. There is a description of the types of funds but nowhere the names of the actual managers. Australian managed funds invested in shares never tell you what they are invested in either. Colonial First State does give the ten largest positions in its quarterly performance reports. But that's it. U.S. prospectuses and fund reports give very detailed information of this type.

Moominmama seems to have zero exposure, as she is invested in the Man-AHL program but not the RMF program. It doesn't look like her UBS hedge funds had any exposure either.

Everest Brown and Babcock have clarified that they have no exposure either.


Revanche said...

Very glad that your losses were limited. I haven't kept up with the news as it breaks like usual, so have only a general idea of how widespread the damage is.

mOOm said...

Only direct investors in Madoff or investors in hedge funds that invested with him are affected. Anyone who invested in diversified funds of hedge funds may at worst have a small impact like this. Such investments are not allowed in the US except for qualified investors (but are not restricted in countries like Australia). But one could have exposure through a pension fund - in the US that's going to mostly be a defined benefit fund (unlike here in Aus). It doesn't seem that any US institutions have been caught investing in Madoff funnily enough apart from feeder hedge funds that just invested in him. It's European institutions mainly that got caught...