By Neil Wilson
The brouhaha surrounding the huge fraud perpetrated by
Bernie Madoff could hardly have come at a worse time for hedge
funds. Performance in general was deeply disappointing in 2008.
Even if the industry did, on average, beat returns in most
asset classes, the fact is that a significant majority of hedge
funds were negative on the year. And with an increasing number
imposing "gate" provisions or suspending redemptions, all too
many managers have also gotten themselves into highly fractious
relationships either with their investors or with their prime
brokers, or both.
Two key questions will dominate the debate about Madoff for
the foreseeable future. One: how did he do it? And two: how did
get away with it - how come the extensive due diligence
supposedly conducted failed to discover that the Emperor had no
clothes? There will be a lot of further investigation and