Tremont Group suspends Rye Investment operations

Date: Tuesday, January 27, 2009
Author: Associated Press

A New York-based investment management company has shut down a hedge fund division which lost $3.1 billion in the Bernard Madoff scandal.

Tremont Group Holdings Inc. said Monday it suspended operations of its Rye Investment Management division, a single manager hedge fund unit, which had invested all of its assets in a fund connected to Bernard Madoff Investment Securities.

"While the Rye Investment Management unit is permanently suspended, it also retains the staff necessary to seek to recover any available Madoff assets," spokesman Montieth Illingworth said in a statement.

The move is part of a restructuring of Tremont's business "to reflect market conditions and the reduced amount of assets under management," Illingworth said.

He said an updated report of assets under management was not yet completed, so he couldn't be specific about how much assets had dropped.

In a mid-December letter to clients the company said it had "exercised appropriate due diligence in connection with the Madoff investments." Illingworth said then that Tremont was victimized in a complex scheme designed to deceive individuals and organizations, managers and analysts including "some of the largest, sophisticated financial institutions in the world."