Sunday, 21 December 2014
Last updated 10 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.
Dec 1 2014 | 10:21am ET
As 2014 winds down, Northern Trust Hedge Fund Services executives took some time to share their outlook on trends facing the industry in 2015. Read more…
Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.