Bank Medici Manages Up to $3.2 Billion of Assets Tied to Madoff
Bank Medici Manages Up to $3.2 Billion of Assets Tied to Madoff
By Zoe Schneeweiss and Matthias Wabl
Dec. 31 (Bloomberg) -- Bank Medici AG, the Austrian bank that disclosed $2.1 billion of possible losses in two funds invested with Bernard Madoff, also manages a third fund that channeled money to the alleged Ponzi-scheme operator.
Medici, founded 14 years ago in Vienna by Sonja Kohn, took over as manager of the third pool of money, the Dublin-based Thema Fund, at the end of 2006, according to a Jan. 2, 2007, regulatory filing. Medici still manages Thema, two people with direct knowledge of the matter said. They declined to be identified as they’re not authorized to give the information.
Thema Fund had $1.1 billion of assets as of Nov. 28, according to data compiled by Bloomberg. The fund suspended redemptions on Dec. 14 after Madoff’s assets were frozen by court order in the U.S., according to a regulatory filing on Dec. 17 by Thema International Fund Plc, the fund’s owner. Madoff was arrested on Dec. 11.
Bank Medici, as investment manager for Thema Fund and the two other funds that put all their assets with Madoff, entrusted him with as much at $3.2 billion, according to disclosures compiled by Bloomberg. The Austrian financial regulator is preparing to take control of Medici, two people with knowledge of the plans said today.
Medici, 75 percent owned by Kohn and 25 percent by Unicredit SpA, declined to comment. Calls to William Fry, solicitors for Thema International in Dublin, weren’t returned. The office was officially closed for the holidays.
Thema Fund was distributed to investors by Genevalor, Benbassat & Cie., a Geneva-based investment adviser, according to Benbassat’s Web site.
‘Appears Massive’
“While the fraud appears massive and spread amongst several large investor bases, Benbassat is focusing on the protection of its clients’ assets and, in consultation with its legal advisors, is in the process of assessing the extent of the fraud,” Alexis Rodet, an investment analyst at Benbassat, said by phone from Geneva.
Medici said in an OTS newswire statement on Sept. 29 that it had $4 billion under management. That includes the Herald USA Segregated Portfolio One and Herald (Lux) US Absolute Return funds, which invested all of their $2.1 billion with Madoff and froze client withdrawals on Dec. 11.
Medici, which reported net income of 541,000 euros ($763,000) in 2007, collected fees of 4.6 million euros from Thema International Fund in 2007 for finding investors, according to its annual report, published on June 23.
Thema Fund started in 1996. It reported a return of 8 percent for the 11 months ended Nov. 28, according to data compiled by Bloomberg. Competing funds fell by an average of 39 percent in the same period, according to the data.
Kohn, 60, had “active relationships” with more than 70 fund management companies representing 2,000 funds, according to Bank Medici’s Web site.
To contact the reporters on this story: Zoe Schneeweiss in Vienna at zschneeweiss@bloomberg.net; Matthias Wabl at mwabl@blo
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