Millennium Management, a $11bn New York hedge fund, has appointed an independent administrator amid demands by investors in the wake of the alleged Bernard Madoff fraud.Millennium appointed London-listed GlobeOp to provide independent valuations and checks on its assets.
Union Bancaire Privée, which had $700m of client money invested with Mr Madoff, decided in December not to invest with a swath of big funds unless they appointed independent administrators.
UBP listed Millennium, as well as Citadel, Renaissance Technologies, Cerberus, SAC Capital and Caxton Associates, among those no longer approved for investment.
Independent administrators are common among newer and smaller funds but rare for the largest, oldest US hedge funds.
Investors want more comfort that reported returns are accurate, after Mr Madoff??s consistently good returns were pointed to as a warning sign many missed. Millennium??s main fund did far better than the industry last year with an estimated loss of just 3.5 per cent.
??We are sending a strong signal about our commitment to transparency and the independent validation of Millennium??s portfolio positions, asset-pricing and expense allocation by appointing GlobeOp as an independent administrator, and by increasing our online investor portfolio reporting,? said Terry Feeney, Millennium??s chief operating officer. GlobeOp had previously worked for the fund doing price verification.
??I don??t know if fraud is ever totally preventable but independent fund administration makes it very difficult,? said Hans Hufschmid, GlobeOp chief executive.
