Consultants also saved clients from Madoff

There was another line of defense between most institutional investors and Bernard L. Madoff Investment Securities LLC — investment consultants.

Prominent alternatives consultants that recommended clients stay clear of Madoff-related strategies include Cambridge Associates LLC, RogersCasey LLC, Albourne Partners Ltd., Aksia Ltd. and Segal Co.

Aksia Chief Executive Officer Jim Vos and head of client services Jake Walthour, in a letter to clients, said that the firm “published extensive reports on several of the feeder funds which allocated their capital to Madoff (Investment) Securities. Our decision not to recommend these feeders was never based on the existence or discovery of a smoking gun; however, there were a host of red flags, which taken together made us concerned about the safety of client assets should they (be) invested in these feeders. Consequently, every time we were asked by clients, we waved them away from the Madoff feeder funds.”

Simon Ruddick, Albourne's chief executive, said Albourne researchers have assumed a low-key profile post-scandal, rather than crow about being proven right after 10 years of recommending clients steer clear of Madoff investments.

But consultants said that clients considering a new investment or those already invested in Madoff strategies or various feeder funds did not always heed their advice. One consultant who spoke on condition of anonymity said his firm was terminated after recommending a client get out of a Madoff feeder fund.

Union pension fund officials and other sources who asked not to be identified said many Taft-Hartley plans were exposed to Madoff investments through hedge funds of funds managed by Meridian Capital Partners LLC, Austin Capital Partners Ltd. and J.P. Jeanneret Associates Inc. Officials from Meridian did not return calls seeking comment and Austin Capital executives declined to be interviewed and instead provided a statement.

The Edison, N.J.-based Carpenters, Regional Council of New Jersey hired Meridian Capital to manage $30 million in June 2005; Meridian was still listed as a manager of the $1.9 billion fund in the 2008 Money Market Directory. George R. Laufenberg Jr., the fund's administrator, and Mitchel J. Green, chief executive officer of the plan's consultant, Investment Performance Services LLC, Savannah, Ga., did not respond to calls seeking comment.

Jeanneret Associates is an investment consultant that also manages discretionary assets. According to its website, the firm specializes in Taft-Hartley funds. Jeanneret manages $947 million for 92 clients according to its ADV filings with the Securities and Exchange Commission.

Several sources with knowledge of the firm who asked not to be named said Jeanneret has many union funds in upstate New York on its client list. John P. Jeanneret, president, chief executive officer and chief compliance officer of the firm, did not return a call for comment, but was quoted in the Syracuse (N.Y.) Post-Standard Daily, as saying his firm has invested with Mr. Madoff for more than 20 years. He said losses from the Madoff-related investments could be “100% to zero.” — Christine Williamson