"To Be Or Not To Be, That Is The Question"

AP – People walk out of 509 Madison Ave were Rene-Thierry Magon de la Villehuchet had an office, Tuesday, …

A hedge fund is a private investment fund open to a limited range of investors that is permitted by regulators to undertake a wider range of activities than other investment funds and also pays a performance fee to its investment manager. Each fund will have its own strategy which determines the type of investments and the methods of investment it undertakes. Hedge funds as a class invest in a broad range of investments extending over shares, debt, commodities and beyond.

As the name implies, hedge funds often seek to offset potential losses in the principal markets they invest in by hedging their investments using a variety of methods, most notably short selling. However, the term "hedge fund" has come to be applied to many funds that do not actually hedge their investments, and in particular to funds using short selling and other "hedging" methods to increase rather than reduce risk, with the expectation of increasing return.

Hedge funds are typically open only to a limited range of professional or wealthy investors. This provides them with an exemption in many jurisdictions from regulations governing short selling, derivative contracts, leverage, fee structures and the liquidity of interests in the fund. A hedge fund will typically commit itself to a particular investment strategy, investment types and leverage levels via statements in its offering documentation, thereby giving investors some indication of the nature of the fund.

A hedge fund manager will typically receive both a management fee and a performance fee (also known as an incentive fee). Performance fees are closely associated with hedge funds, and are intended to be an incentive for the investment manager to produce the largest returns he can. A typical manager will charge fees of "2 and 20", which refers to a management fee of 2% of the fund's net asset value (or "NAV") per annum and a performance fee of 20% of the fund's profit (being the increase in its NAV).

Fees are payable by the fund to the investment manager. They are therefore taken directly from the assets that the investor holds in the fund.

"To be or not to be, that is the question;
Whether 'tis nobler in the mind to suffer
The slings and arrows of outrageous fortune,
Or to take arms against a sea of troubles,
And by opposing, end them. To die, to sleep;
No more; and by a sleep to say we end
The heart-ache and the thousand natural shocks
That flesh is heir to — 'tis a consummation
Devoutly to be wish'd. To die, to sleep;
To sleep, perchance to dream. Ay, there's the rub,
For in that sleep of death what dreams may come,
When we have shuffled off this mortal coil,
Must give us pause. There's the respect
That makes calamity of so long life,
For who would bear the whips and scorns of time,
Th'oppressor's wrong, the proud man's contumely,
The pangs of despised love, the law's delay,
The insolence of office, and the spurns
That patient merit of th'unworthy takes,
When he himself might his quietus make
With a bare bodkin? who would fardels bear,
To grunt and sweat under a weary life,
But that the dread of something after death,
The undiscovered country from whose bourn
No traveller returns, puzzles the will,
And makes us rather bear those ills we have
Than fly to others that we know not of?
Thus conscience does make cowards of us all,
And thus the native hue of resolution
Is sicklied o'er with the pale cast of thought,
And enterprises of great pitch and moment
With this regard their currents turn awry,
And lose the name of action."

Hamlet's Soliloquy by William Shakespeare

AP – Financier Rene-Thierry Magon de la Villehuchet is shown on Nov. 30, 2007. De la Villehuchet, who lost 

The fraud may not have been the work of Rene-Thierry Magon de La Villehuchet, but it came on his watch. For a man with a deep sense of rectitude, that was shame enough.

Friends and colleagues tried to console the fund manager, the scion of French aristocracy who despaired after losing more than $1 billion of his wealthy clients' money in the Ponzi scheme allegedly run by Wall Street wizard Bernard Madoff.

"Listen, people make mistakes," Leon Cooperman, founder of hedge fund Omega Advisors, said he told de La Villehuchet in a telephone conversation Monday. "You're not at fault and you have to pick yourself up from this."

But when a security guard opened the door to de La Villehuchet's office at Access International Advisors the following morning, he found the businessman dead at his desk, both of his wrists slashed. A box cutter and a bottle of sleeping pills lay nearby. Police say it was a suicide.

De La Villehuchet's death marked a grim addition to the toll laid bare since Madoff was arrested Dec. 11, telling FBI agents he had masterminded a $50 billion fraud. And it reinforced the emotional wounds the scandal has inflicted on many of its victims.

De La Villehuchet was shouldering part of the blame, having put so many millions of his investors' fortunes into Madoff's fund only to find out it was a complete fraud. His fund was among the biggest losers in the Madoff fraud, and one of a handful to get taken for more than $1 billion.

Cooperman strongly disputed some reports that de La Villehuchet might have had any deeper involvement with Madoff.

But the responsibility weighed heavily on de La Villehuchet, a descendant of one of France's most distinguished families who had a deeply ingrained sense of personal decorum, associates said. It is not yet known who his clients were.

"This guy is aristocracy, one of his ancestors was the admiral for Napoleon in the Napoleonic wars," said Cooperman, who traveled extensively with de La Villehuchet to meet with potential investors. "I think this thing brought great disgrace and embarrassment, and he didn't have the capacity to deal with it. In the end, he was sensitive to the disgrace and being involved with this thief."

Access International is believed to have lost $1.4 billion with Madoff, whom it entrusted to manage investments in one of its funds. The Luxalpha SICAV-American Selection fund, registered in Luxembourg, was marketed primarily to wealthy European investors.

Access was co-founded by de La Villehuchet in 1994. The company described itself in 2002 as working to "identify the best managers that have a unique and proprietary 'competitive edge,' with a consistent and verifiable track record."

"We endeavor to introduce these managers to investors at the most attractive stage of their development," it said.

De La Villehuchet's firm enlisted intermediaries with links to upper-crust Europeans to attract investors. Among the intermediaries: Philippe Junot, a French businessman and friend who is the former husband of Princess Caroline of Monaco, and Prince Michel of Yugoslavia.

Cooperman described de la Villehuchet as the kind of businessman who was in constant contact with clients, even on vacations.

Claude Renoult, head of the St. Malo Bay nautical club, said de La Villehuchet hailed from a sprawling family of ship owners, and was known as a "very simple man, with a lot of class" who "sailed like a gentleman."

Financier Rene-Thierry Magon de la Villehuchet, a man of great wealth, status and integrity, tragically decided that "the slings and arrows of outrageous fortune" within "a sea of troubles" caused by his investments into the Bernie Madoff multi-billion dollar ponzi scheme, was too much to bear, choosing "the sleep" of suicide. Though at the moment I appear to be a debt ridden working class man, in my imagination I too am a man of wealth and integrity and in a strange way my heart bleeds for Mr. de la Villehuchet. I know the pain of letting loved ones and people in your care down. I know the feeling of shame and sorrow but I also know the Biblical Truth "weeping may endure for the night but joy cometh in the morning" so no matter how bad "the sea of troubles" I am in, I will affirm "this is the day the LORD hath made, I will rejoice and be glad in it". May God have mercy on the soul of Rene-Thierry Magon de la Villehuchet.

tags: hamlets soliloquy  business  capitalism  william shakespeare  hedge funds  religion  philosophy  

links: digg this    del.icio.us    technorati    reddit