Of course, we loved “Dear Shareholder” letters before Bernie Made-off was a twinkle in our pseudo-journalistic eyes, but he has certainly raised the bar. Consider the latest offerings from Gabriel Capital Group, overseeing the Merkin-managed Ariel Fund:
In light of the fraud’s devastating impact on our portfolio and, in particular, on our liquidity, we believe our only realistic option is to wind down Ariel Fund Limited and engage in an orderly disposition of its portfolio positions. The process will likely take several years to complete since many of the remaining assets are illiquid investments. We will distribute proceeds as the assets are realized, and in order to treat all shareholders fairly and equally, the Board of Directors has determined to suspend the determination of the net asset value of the shares and all redemption rights (including pending redemption requests).
Ariel Fund liquidation letter 12 19 08.pdf
Ariel Revised Financial Statements Dec 31 2007.pdf
I want to work for BDO Tortuga
I think many hedge funds are ponzi schemes – the only reason Madoff couldn’t continue with his is that lots of people were trying to take money out because of the economy.
At Citadel they refuse to let people take money out right now – obviously they don’t have the money to give them. There isn’t any difference except Madoff couldn’t stop people from asking for their money. It’s another reason people at hudge funds refuse to tell anyone their investing strategies.
@2 – please sit on the floor for the rest of the day. You’ve lost the privilege of sitting in a chair.
Please use the following instructions for future submissions:
1) Open Dealbreaker.com
2) Read article
3) Scroll to “Post Your Comment” section
4) Remove head from sphincter
5) Type response
6) Click “Post Comment” (at least you know to click it just once)
We believe our funds are truly hedged to weather any market environment. By investing in one manager, we have the ability to earn a 2% management fee while not doing any managing of our own. If you have any questions, please refer them to Bernie Madoff. We don’t know what to tell you.
Dylan Ratigan knows how to post a comment.
You need to use the following instructions for future responses:
1) Find better way to cope with anger at failed life
2) Accept that your life is miserable
3) Stop taking that out on other people
4) Accept that you’re pretentious
5) Accept that men who use the word “sphincter” have unresolved homosexual issues
6) Stop being such a jerk
i’m a little slow today. Where do the Madoff funds show up in the financial statements? Surely not cash and cash equivalents.
Charging 2/20 to put investors into Cerberus as well as Madoff? Classy.
@7 — probably included in the US treasuries, which accounted for ~40% of net assets. Remember that Bernie was “invested” in treasuries most of the time, getting out of them only when the opportunity to invest was ripe.
Note that Merkin’s fund also had about 15% of its net assets in GMAC and Chrysler, and about 10% in various Cerberus funds (doubling up the GMAC/Chrysler exposure, perhaps?).
These investments are a thing of beauty.
Was Madoff providing a managed account for Ariel or was Ariel a feeder fund for Madoff’s main fund? I thought it was a feeder fund in which case I wouldn’t think Ariel would look through to the underlying investments. Still confusing.
@11 — technically, Madoff never had a fund. His firm just had discretionary investment authority over the funds that Merkin and the other feeder funds deposited with him.
Gracias, all is clear.
@12 – Gracias, all is clear (and the auditors are dead).