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September 02, 2005
Can an investment go wrong when everything else about them is absolutely right?
The investors of the four Bayou funds are a disturbed lot these days. Money that was promised to be wired to their accounts in mid August is no where to be seen. Nor is the company talking or offering any clarification to its investors. The investors are surprised with this because the fund always looked and was professional all this time. There was absolutely nothing that could indicate that such a situation could arise. Now the Federal Bureau of Investigation has joined Connecticut banking officials and federal prosecutors who are all trying to sort out the matter. The fund manager Samuel Israel is a Wall Street veteran who always believed in keeping his investors informed.
He sent descriptive emails to the investors every week and conducted a conference call with his investors once a year. The funds performance was also impressive with the returns exceeding benchmarks. To top it all, the fund did not have a lock in period and also did not charge its investors the management fee and only charged them 20% on profits. The investors are still wondering what happened!! Nytimes.com reports:
“Investors who spoke about their involvement in the funds said they were surprised by recent events and that Bayou had none of the earmarks of a Ponzi scheme.”
Read More: A Hedge Fund Falls Off the Face of the Earth
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