The acknowledged Madoff feeder funds — New York-based Fairfield Sentry and Tremont Advisors’
Broad Market; Kingate, operated by FIM of London; and Swiss-based Thema — derive all the incentive
fees generated by the program’s returns (there are no management fees), provide all the administration
and marketing for them, raise the capital and deal with investors, says Madoff.
Madoff Securities’ role, he says, is to provide the investment strategy and execute the trades, for which
it generates commission revenue.
Of course, "nothing" means "everything" in this case: Madoff might not have charged any management fees — he just stole all the money instead.
And in light of what’s been happening in the S&P of late, this is just hilarious:
The apparent lack of volatility in the performance of the fund, Madoff says, is an illusion based on a
review of the monthly and annual returns. On an intraday, intraweek and intramonth basis, he says, “the
volatility is all over the place,” with the fund down by as much as 1%.
Here’s how the article ends:
Madoff, who believes that he deserves “some credibility as a trader for 40 years,” says: “The strategy
is the strategy and the returns are the returns.” He suggests that those who believe there is something
more to it and are seeking an answer beyond that are wasting their time.
I hope they all lived to see this day.