Goldman Sachs Closing “Cadillac of Hedge Funds”
Goldman Sachs Closing “Cadillac of Hedge
Funds”
Goldman Sachs announced Friday it is shutting down Global Alpha, a hedge fund that was once one of the bank's most prized assets. At one time, the fund managed more than $12 billion in assets, but now holds just $1.6 billion. Goldman expects to return between 85 and 90 percent of the funds assets to investors by the end of October.
Once referred to as the “Cadillac of hedge funds” by industry insiders, Global Alpha was founded in 1997 by Cliff Asness, who developed the statistical models that drove the fund's trades. The fund would perform well until 2006, when it lost 6 percent, but things would get even worse the following year. In July 2007, the Global Alpha fund lost 7.7 percent. The strategies used in the fund were so similar to those used by other hedge funds that losses escalated when multiple funds tried to exit the same positions at the same time. Global Alpha would lose a staggering 22.7 percent in August 2007.
The Global Alpha fund would improve its performance in 2008 and 2009, but investors continued pulling out, anyway, leaving its assets at the end of 2009 at just $2.5 billion. In 2010, the fund remained flat, but has lost about 13 percent so far in 2011, leading to the decision to close it. The move is part of Goldman's plan to exit quantitative hedge fund strategies altogether, according to insiders.
Goldman Sachs announced Friday it is shutting down Global Alpha, a hedge fund that was once one of the bank's most prized assets. At one time, the fund managed more than $12 billion in assets, but now holds just $1.6 billion. Goldman expects to return between 85 and 90 percent of the funds assets to investors by the end of October.
Once referred to as the “Cadillac of hedge funds” by industry insiders, Global Alpha was founded in 1997 by Cliff Asness, who developed the statistical models that drove the fund's trades. The fund would perform well until 2006, when it lost 6 percent, but things would get even worse the following year. In July 2007, the Global Alpha fund lost 7.7 percent. The strategies used in the fund were so similar to those used by other hedge funds that losses escalated when multiple funds tried to exit the same positions at the same time. Global Alpha would lose a staggering 22.7 percent in August 2007.
The Global Alpha fund would improve its performance in 2008 and 2009, but investors continued pulling out, anyway, leaving its assets at the end of 2009 at just $2.5 billion. In 2010, the fund remained flat, but has lost about 13 percent so far in 2011, leading to the decision to close it. The move is part of Goldman's plan to exit quantitative hedge fund strategies altogether, according to insiders.
Comments
Top Stories
Latest DT's
-
1 month ago by Geno -
1 month ago by dallaseste
-
1 month ago by Geno
-
1 month ago by Geno
-
1 month ago by Geno
-
1 month ago by Geno
-
1 month ago by Geno
-
1 month ago by Geno
-
2 months ago by dallaseste
Top Authors
Subscribe
Games
Alias
3 Foot Ninja 2
ALIAS 2
Air Dodge
Battle Tanks
Bomber Bob
Cable Capers
Gem Mania
Hacker
Hostile Skies
Mission Mars
Bowling
Samurai Warrior
The Pharoh's Tomb
Monkey Lander
Muay Thai
Action
Donkey Kong Banana Barrage
501 Dart Challenge
Rooftop Skater
Zelda
Donkey Kong
Xtreme Pinball
Tetris
Connect 4
Battleships
Frogger
Penguin Push
Online Video Poker
Spank The Monkey
Mob Pay Back
Dealer
Yeti Sports Seal Bounce
Hold Your Drink Steady
Solitaire
Canyon Glider
3D Sudoku
Metal Slug Rampage
Street Fighter II
Flashman
Disc Golf
Table Tennis
Ninja Air Combat
Celebrity Hitman Terrorist Alert
Spider Solitaire
Tubin
Presidential Knockout
Global Player
Ma Balls
Baseball
Beckham Fit
0 Comments
Click here to sign up now.