The London investment company, Centaur, which launched its Galileo fund to provide investors with the opportunity to generate returns through none other than sports betting has collapsed resulting in what is reported to be a 100% loss with investors holding the bag for about $2.5 million.
At this point, it’s not clear if the fund lost all the money as a result of bad bets or if there was some type of fraud involved. Although not a typical hedge fund, the Galileo collapse highlights some of the risks inherent in hedge funds which aim for high-risk, high-reward investments. A recent study by Princeton Researches found hedge funds to be far riskier and provide much lower returns than is commonly supposed.
According to attorney Pratt H. Davis at Page Perry “recent studies have shown that when hedge fund returns are looked at on a risk-adjusted basis they simply do not generate enough consistent returns based on the substantial amount of risk involved. This is just enough example of a collapse of a fund that supposedly had a ‘unique proprietary’ system that unsurprisingly, and unfortunately for the investors, did not work out.”
Page Perry is an Atlanta-based law firm with over 170 years of collective experience maintaining integrity in the investment markets and protecting investor rights.