Tremont invested more than half its assets with Bernard Madoff

Tremont Group Holdings Inc., a hedge- fund firm owned by OppenheimerFunds Inc., had $3.3 billion, or more than half its total assets, invested with Bernard Madoff, according to a person familiar with the matter.

Tremont’s Rye Investment Management unit had $3.1 billion, virtually all the money the group managed, allocated to Madoff, said the person, who declined to be identified because the information is private. Tremont had another $200 million, or about 7 percent of its total assets, invested through its fund of funds group, Tremont Capital Management.

Tremont, which manages a total of $5.8 billion, would have made roughly $62 million this year peddling funds that are solely run by Madoff, who was arrested Dec. 11 after he allegedly confessed to running a “giant Ponzi scheme” that may have bilked investors out of $50 billion. Hedge funds that invested with the 70-year-old Queens, New York-native charged fees to their clients for the task of vetting the fund.

“We believe Tremont exercised appropriate due diligence in connection with the Madoff investments,” the firm said today in a statement. Other funds that invested big with Madoff include Walter Noel’s Fairfield Greenwich Group, which had about $7.5 billion out of its $14.1 billion in total assets invested with the manager.

All together funds of funds had at least $20.3 billion invested with Madoff, who charged no fees to investors, getting paid instead through commissions from his brokerage business for trading the stocks in the accounts.

Investors ensnared by Madoff include Fred Wilpon, the owner of the New York Mets baseball team, clients of private bankers in Geneva, wealthy Jewish families in New York and Palm Beach,Florida, and institutions including BNP Paribas SA in Paris that loaned investors money to increase their bets. Losses have been reported by a pension fund in Fairfield, Connecticut, New York hospitals and a charity in Salem, Massachusetts.

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