Funds of Hedge Funds Politics & Regulation Tax & Legal

PAAMCO Founders fight over equity stake claims


PAAMCO Founders, which represents 95% of the ownership of the $8.5 billion institutional fund of hedge funds business, is hoping to prevent one of its early lenders, backed by Donald Sussman of Paloma Partners, from taking a 40% membership interest in the group.

In early 2000, PAAMCO Founders - Jane Buchan, James Berens, William Knight and Judith Posnikoff - approached Sussman, principal of Franklin Realty, about securing an investment in which to launch their business.

According to a complaint filed in US District Court of the Southern District of New York by Franklin Realty, the deal included a $2