Greenwich Time – Fairfield Sentry Ltd., seeking to recover more than $919 million in fees related to investments involving Bernard Madoff, sued the Fairfield Greenwich Group hedge fund that lost $7 billion in Madoff’s fraud.

Fairfield Sentry, based in the British Virgin Islands, said in a complaint filed May 29 in New York State Supreme Court in Manhattan that it is the largest victim of the fraud perpetrated by Bernard Madoff.

The fund seeks to recover more than $919 million in investment management and performance fees that it paid to Fairfield Greenwich based on inflated net asset value reports of its investments with Bernard L. Madoff Investment Securities LLC.

Fairfield Greenwich, led by Greenwich resident Walter Noel, claimed it had $16 billion of assets under management, $7.3 billion of which was purportedly in Fairfield Sentry Ltd., according to the complaint.

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Bloomberg – Penjing Asset Management, a Hong Kong-based hedge fund of funds manager overseeing about $520 million, said it may not get any performance fees until next year, and declining income will restrict staff bonuses.

The company, which ran the fourth-best-performing Asia- Pacific fund of hedge funds last year, plans to keep all its 22 staff as layoffs by rivals make it cheaper to retain talent, said Chief Investment Officer Ronnie Wu.

“Realistically, 2009 we are just trying to climb the high- water mark,” Wu, 40, said in an interview yesterday, referring to a fund’s peak net asset value. “If we’re lucky, maybe we will get some incentive fees in 2010. It will be tough. The senior guys will take a pay cut. But if we can keep everybody intact, I think the future will get better again.”

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Tags: asia-pacific, asset-management, asset-value, chief-investment-officer, fund-of-hedge-funds, hedge fund of funds, high-water-mark, hong kong, incentive fees, layoffs, net asset, performance-fees, rivals