KEY POINTS:
It's very difficult to feel sorry for the super rich but Ian Urbina in this article in the New York Times does his best to work up some sympathy for those more fortunate than ourselves.
The story, one of the thousands launched in the wake of the Bernard Madoff scandal, catches up with some of his former friends and victims stung by what appears to be the biggest ponzi scheme in the history of mankind.
Urbina paints a picture of doddering old magnates "in pastel sweaters and sockless penny-loafers" reeling around the Palm Beach Country Club pining for their lost millions.
"But more than wealth, these people seemed to have lost a sense of trust and prestige," he writes.
That Madoff could disappear US$50 billion - or send it to "money heaven" as one story had it - simply by suckering in an ever-widening circle of golfing buddies would, if that's all there was to it, have sent professional investors into self-righteous lecturing pose.
But what has sent the investment world into apoplexy is the fact many of these professionals were also duped by the Madoff aura. Hedge funds, banks and other institutions around the world are now no doubt 'reviewing their risk management processes' that essentially consisted of the assumption that Madoff was a financial genius.
His mad genius has infected the world and New Zealand investors are likely to have caught a small dose of it too through the Man Group, which admitted this week it had US$360 million at risk with Madoff (the NZ exposure, if there is any, would be a tiny fraction of this).
Man, the world's biggest listed hedge fund operator, said one of its underlying managers, RMF, placed the money with Madoff.
In New Zealand, Man has raised millions from investors over the years through its OM-IP range and RMF featured in several of those offerings. See, for example here.
In its marketing blurb, the Man website says RMF places "a premium... on skill-based strategies that are repeatable and have a clearly defined source of return".
And if gullibility could be classed as a 'clearly defined source of return', Madoff was the perfect man for Man.
David Chaplin
Photo: Bernard Madoff. AP Photo/The New York Times, Ruby Washington
