A fellow local blogger in Plainfield alerted me to a Fortune magazine story from several weeks ago. “The Smoldering Hedge Fund”, a three-month-long investigative story details the troubles of Greenwich, Conn.-based Plainfield Asset Management. What’s this got to do with Rahway?

P & F Management was founded in 2005 as a joint venture of Plainfield Asset Management (PAM) and Glen Fishman of Lakewood-based Fishman Real Estate Enterprises. Fishman is managing partner with Dornoch Holdings, which is owned and operated by P & F Management. Dornoch had multiple projects in the works — The Savoy (photo below), The Westbury — and bought up several other properties downtown for millions at the height of the real estate boom in 2006 with plans for redevelopment. Dornoch also has a project in Plainfield.

Plainfield Asset Management once managed $5 billion but today oversees $3.3 billion, according to Fortune, and “has faced a wave of withdrawal requests, which it contained only by invoking a contract clause and refusing to let investors withdraw money.” Of the $3.3 billion, $2.7 billion represents money from investors who weren’t permitted to leave, and won’t until 2012. As the Fortune story puts it, only $560 million managed by PAM is from people who “actually want the firm to run their money.” The fund continues to charge investors management fees.

Without getting too much further into it, PAM is “fending off suits from borrowers,” according to Fortune, and its “lending practices are now being examined by the New York City’s district attorney.” I encourage you to read the Fortune story in its entirety.

How does this all affect Dornoch’s Rahway projects? It’s unclear exactly but it can’t possibly be good. I’d ask someone at Dornoch but the number to their Hillside offices has been disconnected maybe I’ll pay them a visit. [Feb. 10 UPDATE: Since this original post, I was able to get through on the phone, if only to a maze of voicemail menus and greetings. So apparently the phone is not disconnected.]

Asked about the report in Fortune, Mayor James Kennedy said he never heard of P&F Management and doesn’t know who Fishman’s partners are, while City Administrator and Redevelopment Director Peter Pelissier said he was aware of a Holland-based hedge fund backing Dornoch.