Madoff scam hurts Mackenzie Financial

A hedge fund at Mackenzie Financial Corp. of Toronto invested about 20% of its assets with Bernard Madoff's investment firm, Bernard L. Madoff Investment Securities LLC of New York, according to a report in Canada's Globe and Mail newspaper. The Mackenzie Alternative Strategies Fund, run by Tremont Group Holdings Inc. of Rye, N.Y., suspended redemptions and began to wind down positions after the C$19 million ($15.9 million) fund lost 47% of its assets in December. The fund lost 59% of its value in 2008. Tremont notified Mackenzie that the Tremont Opportunity Fund Ltd. ceased making redemptions "in the normal course," as a result of the "significant impact of the global market crisis," according to the statement. The assets of the hedge fund are primarily invested in TOFL, Mackenzie said. "As a result of Tremont's notification, the fund notified investors it has suspended purchases and redemptions and began a process of orderly liquidation. This course of action was taken to ensure that all investors have equal access to funds as and when they become available," according to the statement. David Feather, president of Mackenzie's fund unit, said the firm became aware of the indirect exposure to Mr. Madoff's firm after Tremont notified it last month, according to the report. Mr. Madoff was arrested Dec. 11 on securities fraud charges alleging that he swindled $50 billion from investors in an elaborate Ponzi scheme. A call to MacKenzie was not immediately returned.