It should come as no surprise that the Madoff losses have resulted in a big spikey-spike in "we promise we have a bunch of investments, just ask Bob over there" shifts to third party administrators. Lots of larger funds had integrated substantial administration and back office services into their own operations at least for cost savings purposes (if not for less savory reasons). Now that move is being unwound all over, pushed somewhat belatedly by financial institutions like Union Bancaire Privée. DE Shaw is just the latest in a number of firms moving in this direction.
Since Bernard Madoff was arrested and charged with fraud in New York in December, US hedge funds have been under unprecedented scrutiny from investors concerned about possible repeats of the problem. Earlier this year Millennium Management, the $11bn New York hedge fund, appointed London's GlobeOp to act as an independent administrator, to reassure investors.
We suppose going long administrators is already played out.
Fund plans third-party checks [The Financial Times]