Avon Pension Fund
Administered by Bath and North East Somerset Council
Administered by Bath and North East Somerset Council
News
Archive - December
2008Avon Pension Fund's investments in Madoff, US hedge fund manager
You may have read about the US hedge fund manager, Bernard Madoff, who has been arrested for an alleged fraud within his funds.
Within its strategic investment policy, the Avon Pension Fund has allocated some of its assets to Funds of Hedge Funds. By investing in funds of hedge funds rather than in individual hedge funds, the Avon Pension Fund is able to reduce the manager risk by diversifying its holdings between many different hedge funds.
One of our fund of hedge fund managers, MAN Investments, invested a relatively small amount of the Avon Pension Fund's assets in a hedge fund managed by Madoff. As a result, the Avon Pension Fund had a holding equivalent to 0.03% of its total assets, or £550,000. MAN has already written down the value of the holding to zero.
The Fund will be monitoring the developing legal situation closely. This event once again throws up significant questions about the regulatory framework and ability of regulators to supervise financial institutions and investment managers.
The loss of this sum will not affect the pensions to any staff or pensioners as these are secure. It will have a minor impact on the performance of the fund for the year.
You may have read about the US hedge fund manager, Bernard Madoff, who has been arrested for an alleged fraud within his funds.
Within its strategic investment policy, the Avon Pension Fund has allocated some of its assets to Funds of Hedge Funds. By investing in funds of hedge funds rather than in individual hedge funds, the Avon Pension Fund is able to reduce the manager risk by diversifying its holdings between many different hedge funds.
One of our fund of hedge fund managers, MAN Investments, invested a relatively small amount of the Avon Pension Fund's assets in a hedge fund managed by Madoff. As a result, the Avon Pension Fund had a holding equivalent to 0.03% of its total assets, or £550,000. MAN has already written down the value of the holding to zero.
The Fund will be monitoring the developing legal situation closely. This event once again throws up significant questions about the regulatory framework and ability of regulators to supervise financial institutions and investment managers.
The loss of this sum will not affect the pensions to any staff or pensioners as these are secure. It will have a minor impact on the performance of the fund for the year.
| 12/12/2008 |
