Wednesday, 25 November 2015
Last updated 7 hours ago
Aug 24 2010 | 1:12pm ET
It appears increasingly unlikely that Goldman Sachs’ hugely profitable proprietary trading desk will enter the brave new post-Dodd-Frank world as a hedge fund.
The Wall Street giant has no plans—and has never had any plans—to spin off its Goldman Sachs Principal Strategies unit as an independent hedge fund, Fox Business reports. And transforming the group into an internal hedge fund is only marginally more likely.
“First priority for Goldman Sachs is to find different places for those proprietary traders to work,” Fox’s Charles Gasparino reports. “Second priority is maybe fold the proprietary desk… into an existing fund in the asset management division.”
Only then will Goldman consider creating “a separate hedge fund inside the asset management division,” and Gasparino says “that’s the least likelihood.”
Banks have about four years to end their proprietary trading activities, which are barred under the recently-passed Volcker rule. Goldman may also be reticent about creating an internal hedge fund, because banks are only permitted to invest 3% of their tier-1 capital in alternative investments, meaning that the firm would have to raise a huge amount of outside capital for its former prop. desk.
Oct 21 2015 | 10:41am ET
One of the most unique charity benefits in the hedge fund industry, A Leg To Stand On's (ALTSO's) Hedge Fund Rocktoberfest - NYC, raised nearly $500,000 last Thursday thanks to the generous support of major sponsors and nearly 1,400 attendees from the Tri-State finance, business and hedge fund communities. Read more…