e. lee hennessee pioneered hedge-fund research in the 1980s at a time when workings of those investment pools were murkier than they are today. she created the hennessee hedge fund index and a newsletter covering investment strategies and performance. <u+201c>in the early days, hedge-fund managers would just show their numbers and tell you how to wire money, and they could get away with saying they went to a school they didn<u+2019>t go to,<u+201d> she told the wall street journal a decade ago. <u+201c>today investors ask about things like the turnover at a firm, and even your family life.<u+201d> ms. hennessee died oct. 29 at her trump plaza home in west palm beach, fla. she was 64. a spokesman for the family said she apparently suffered a stroke. read a collection of in-depth profiles at wsj.com/obituaries . delving into a field dominated by men, ms. hennessee initially did hedge-fund research at wall street firms e.f. hutton group inc. and republic new york securities corp. in the mid-1990s, she became an independent researcher. along with her husband, charles gradante, she built up hennessee group llc, which advised wealthy people on fund choices. that business created trouble for them when one of the fund managers they recommended, bayou management llc, collapsed in 2005. the securities and exchange commission filed a complaint saying hennessee group failed to respond to red flags and didn<u+2019>t vet bayou<u+2019>s accounting firm. hennessee group didn<u+2019>t confirm or deny the allegations but agreed to pay $814,644 in disgorgement and fines. in 2007, a federal judge dismissed a lawsuit filed against hennessee group by a client who lost money in the bayou collapse. <u+201c>the failure to conduct due diligence is not the same thing as knowing of or closing one<u+2019>s eyes to a known <u+2019>danger,<u+2019> or participating in the fraud,<u+201d> wrote u.s. district judge colleen mcmahon of the southern district of new york. ms. hennessee told the wall street journal that she had kept a close eye on bayou and visited the firm<u+2019>s founder, samuel israel iii, after he had back surgery. <u+201c>i wanted to look at his face and see if he was back and looking strong,<u+201d> she said. <u+201c>he looked great. he actually jumped for me.<u+201d> mr. israel later pleaded guilty to fraud and was imprisoned after faking a suicide. ms. hennessee and her husband sold the advisory business to terrapin asset management llc in 2013. elizabeth lee hennessee was born sept. 1, 1952, and grew up in raleigh, n.c.<u+00a0>she graduated in 1975 from randolph-macon woman<u+2019>s college (now randolph college) in lynchburg, va., where she studied psychology and education. she was widely quoted in the media on hedge-fund topics and was known for wearing floppy broad-brimmed hats. she is survived by her husband, her mother and two brothers. write to james r. hagerty at bob.hagerty@wsj.com
lee hennessee helped lift the veil of secrecy at hedge funds - wsj
james r. hagerty