Hedge Funds Politics & Regulation

Morgan Stanley, Grosvenor invested with Diamondback, Level Global

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In addition to having a fair amount of pension money, three of the hedge funds under investigation had some substantial investments from funds of funds.

A number of large funds of funds are invested in Diamondback Capital Management, Level Global Investors, and Loch Capital Management, three of the hedge funds being examined by the Federal Bureau of Investigation as part of a large government probe of insider trading activities. Last week it was revealed that a substantial number of pensions had allocated to these managers (see Diamondback, Level Global among pension darlings). Among the fund of funds investors that had allocated to them are Morgan Stanley, Grosvenor Capital Management and Lazard Asset Management.

Three of Morgan Stanley’s funds invested in Diamondback as