you will need to explain that for the non accountants here
This funds assets were primarily level 3 - which basically means hard to value/not marketable securities/aka bs.
(Could be litteraly anything. - from equity in small businesses, loans, insurance contracts, real estate, etc etc etc. It doesn't matter- the bad auditors rely on management estimates and perform some garbage reasonablness tests..Provide clean financials and all of a sudden the fund made 15% last year..)
Investor money is swept out as management fees and performance fees... - based on the funds performance!
Anyway, they had consistent massive unrealized gains by booking bogus appreciation on these "assets".
It's all very nice untill investors wish to redeem. - kesef minolon?