According to an industry source, here’s the real reason Ivy Asset Management folded yesterday: “the founder’s son took over and the f&%$ing moron ran the place into the ground.”Sean Simon, son of Ivy (a fund of funds) founder Lawrence Simon, resigned from Ivy Asset Management in January “to pursue other interests.”
Sean Simon and Michael Singer took over the firm from Larry Simon in January 2006. Immediately things started to go bad.
According to iinews, by September 2006, one of their fund’s, Rosewood’s, assets had fallen from $2 billion to less than $300 million. That same month, Rosewood fell 3.5 per cent (a huge drop for a broadly diversified fund of funds) mostly because it had invested in Amaranth Advisors, the hedge fund that collapsed epically after losing $6.5 billion on a bet in natural gas. Two other Ivy funds were also invested in Amaranth and lost big. After that, investors redeemed $1 billion from Ivy and it was all down hill from there.
As early as 2007, Ivy had fired a quarter of its staff. At the time, they said the cuts were the result of a painful but necessary reorganization as it tries to regain lost ground.But Ivy’s assets quickly fell from $14 billion in 2007 to $5 billion at the end of December 2009 and $2.5 billion ultimately.
In their last year, Ivy had also been under investigation concerning their reportedly giving advice to investors to put money with Madoff.
The main issue is whether Ivy failed to tell investors it had concerns about Mr. Madoff’s firm. If that lawsuit is anything like this one against Goldman Sachs though, it’s a non-starter. Ivy joins other fallen firms in the rubble of the housing crisis.
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