Fairfield Greenwich presented itself as being among the best-of-the-best in terms of manager-selection ability. The reality appears to be this: It was indeed expert at selecting the biggest Ponzi scheme in history–and otherwise mediocre at best.
Check out the year-to-date performance of Fairfield’s dozens of funds through November and mid-December (embedded below). Bear in mind that many of these funds benefitted from some exposure to Madoff’s fake returns (so the real returns were even worse). Also bear in mind that most of these funds were designed to preserve capital in all markets, thus minimising exposure to years such as these (there’s no other reason to pay huge fees and sacrifice upside in bull markets).
Yes, hedge funds and funds-of-funds have had a bad year. But with the exception of Madoff’s Ponzi scheme, the performance of Fairfield’s slate of funds seems distinctly awful–especially considering that the asset-fees alone paid Fairfield about $150 million a year.