Funds of funds claimed to select the best managers through skilled due diligence and charged standard 2 and 20 fee structures for that service, while in reality depositing the vast majority of their capital into Madoff's opaque fund.
Source quote, verbatim
and investment analysis practices and then in return charged their investors standard private fund fee structures (2/20).139 In reality, most of these funds were depositing the vast majority of their capital into Madoff's black box of a fund.
From
Wulf A. Kaal, Private Fund Investor Due Diligence – Evidence from 1995 to 2015 (2016), III.B.3. Impact of the Madoff Ponzi Scheme, p. 41 https://ssrn.com/abstract=2811718 · source PDF
Cite as
Wulf A. Kaal, Private Fund Investor Due Diligence – Evidence from 1995 to 2015 (2016). SSRN: https://ssrn.com/abstract=2811718
Holds when
Madoff feeder funds and funds of funds before December 2008
Classification
failuresupport: arguedfailure: fee for diligence never performedfamily: fraud-and-misconductinstitutional-design
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