Goldman Sachs Hedge Funds
Goldman Sachs Starts Unwinding Hedge Fund Investments
Goldman Sachs (GS) is beginning what could be a two-year process of unwinding its hedge fund business in order to comply with the Volcker Rule. The Volcker Rule (named after former Fed Chairman Paul Volcker) bans banks from holding more than 3% of the assets of any one fund.
Goldman detailed its plans in a correspondence with the SEC last June. The regulator asked the bank to disclose the extent to which hedge fund and private-equity investing had been terminated or disposed of as well as steps the firm planned to take.
The correspondence was posted on the SEC’s website last week, though the plans were also disclosed in securities filings.
Goldman manages $20 billion of hedge fund assets for clients in its Goldman Sachs Asset Management division. The firm’s own investment in hedge funds was valued at $3.2 billion at the end of December, according to its recent annual financial filing, in strategies including long/short equity, credit, convertibles, risk arbitrage, special situations and capital structure arbitrage, the filing said.
Its Petershill fund invests in several outside hedge funds, including Partner Fund Management, Mt. Lucas Management, Winton Capital, Altana Wealth, and Capula Investment Management.
Goldman didn’t disclose which funds would be affected by the unwinding. Some of its stakes don’t cross the 3% threshold. Source
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