Goldman Sachs flagship fund falls 8%

Discussion in 'Wall St. News' started by crgarcia, Aug 6, 2007.

  1. Goldman Sachs flagship fund falls 8% William Hutchings
    06 Aug 2007

    Goldman Sachs’ $10bn (€7.3bn) flagship hedge fund dropped nearly 8% in a week at the end of last month as hedge funds recorded their worst returns in at least four years.

    The GS Global Alpha fund made a loss of 7.7% before fees in the week ended July 27, taking its performance for the year to -12.1% before fees, according to an investor.

    That stretches its run of disappointing returns to more than 18 months, having reported a loss of 6% last year. It gained almost 40% in 2005 and its annualised return, before fees, is 15.1% since launch in 1995. It is understood the fund’s volatility has averaged 17% a year since launch. The bank declined to comment.

    David Viniar, Goldman Sachs chief financial officer, said in June there had been no substantial redemptions from the fund. However, in the last two quarters the hedge fund’s poor performance has dented Goldman Sachs Asset Management’s profits because it failed to earn performance fees.

    Goldman’s losses came as the hedge fund industry suffered its worst calendar week in four years, with the investable hedge fund index, published by data provider Hedge Fund Research since 2003, dropping 3.01%. Another fund, Man AHL, run by UK firm Man Group, fell 6.7% the same week.

    German firm Union Investment said last week its €1bn ($1.4bn) ABS invest fund shed 2.05% between July 1 and July 23, hit by losses in US sub-prime mortgage-backed securities, and that it had stopped investors removing capital until further notice.

    US firm Sowood Capital Management registered a loss of 57%, or more than $1.5bn, as it sold what remained of its portfolio to rival Citadel. Tudor Investment Corporation’s $9bn raptor fund shed 9.02% while Caxton Associates’ $11bn flagship fund dipped 3%. UK manager Clareville Capital Partners suffered a 2.6% slide.

    However, UK-based Augustus Capital’s $500m diversified fund rose more than 5% last month.

    http://www.financialnews-us.com/index.cfm?page=ushome&contentid=2448476170