Goldman Sachs Group Inc.'s Global Alpha hedge fund rebounded this year after a 40 percent plunge in 2007, said three people with knowledge of its performance. Global Alpha, once Goldman's largest hedge fund, rose about 19 percent through mid-June, said the people, who declined to be identified because the returns are confidential. Goldman's Global Equities Opportunities fund, which required a $3 billion cash infusion last year, rose about 7 percent, the people said. The gains reflect an improved performance for quantitative funds, which rely on computers to select trades, after investors rushed to exit similar strategies last year during the credit crunch. Global Alpha, run by Mark Carhart and Raymond Iwanowski, shrank to about $2.5 billion from a peak of $12 billion, while Global Equities fell to $1 billion in assets from $6 billion. ``One of the lessons learned is we cannot be as big as we were,'' said Robert Litterman, head of Goldman's quantitative investments, at the GAIM International hedge fund conference in Monaco on June 19. ``We couldn't get out and if we had it would have made it worse. We had to ride it out.'' Goldman now uses proprietary trading ideas for about 35 percent of its positions, compared with 5 percent last August, when funds with similar trades rushed to unwind them in what Litterman called a ``de-leveraging explosion.'' ``It was a disaster by any description,'' possibly prompted by funds selling to raise capital for losses elsewhere, such as subprime mortgages, Litterman said. Goldman spokeswoman Andrea Raphael in New York declined to comment. http://www.bloomberg.com/apps/news?pid=20601087&sid=aRD59zhbfKLg&refer=home