Great frauds in history: Helmut Kiener, Germany’s mini-Madoff

The performance of Helmut Kiener’s fund of funds, which invested money from institutions and private investors into hedge funds, seemed too good to be true. It was.

Helmut Kiener © Hannelore Foerster/Bloomberg via Getty Images
(Image credit: Helmut Kiener © Hannelore Foerster/Bloomberg via Getty Images)

Helmut Kiener (pictured) was born in the German town of Wernberg in 1959. After studying statistics at a local technical college, and doing his national service, he studied at various universities, eventually graduating with a diploma in psychology. After briefly working as a social researcher, in 1988 he set up an investment fund, Kiener Company (later named K1 Group), with his friend Dieter Frerichs. This “fund of funds” used money raised from institutional and private investors to invest in other hedge funds, based on their past performance.

What was the scam?

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Dr Matthew Partridge
Shares editor, MoneyWeek

Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.

He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.

Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.

As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.

Follow Matthew on Twitter: @DrMatthewPartri