When Merkin Met Madoff

New York Magazine’s Steve Fishman writes what is, perhaps, the best character study to date of both Bernard Madoff and the disgraced investor and Madoff enabler J. Ezra Merkin. The article, at times sympathetic, delves deep into the psyches of both men — pulling up new information about Madoff ‘s class resentment, and about what led Merkin to cast his lot with the alleged Ponzi schemer.

The answer to the latter question has a surprising lot to do with Merkin’s apparently tortured relationship with his own father, the late investor and philanthropist Hermann Merkin. Fishman writes:

One of the many interesting revelations to come out of the article is that although Merkin was widely regarded as brilliant, he actually wasn’t much of a money manager; rather, he was a master salesman who wowed customers with his erudition rather than his financial acumen. In fact, Merkin’s whole hedge-fund business was built on funneling his investors’ money to successful fund managers, rather than investing himself.

That was certainly the case when it came to Yeshiva University’s endowment, which Merkin, as the chairman of the school’s investment committee, helped guide. He channeled large portions of the university’s funds to Madoff, via his own Ascot Partners hedge fund. Merkin would ultimately collect a total of $10 million in money management fees from YU. According to Fishman’s article:

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When Merkin Met Madoff

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