Goldman To Shutter Prop. Desk

Sep 7 2010 | 8:30am ET

Goldman Sachs’ proprietary trading business—the cradle of many of the world’s most successful hedge fund managers—will close to comply with new U.S. financial regulations, but not before spawning another hedge fund or two.

Goldman Sachs headquarters, TribecaGoldman Sachs headquarters, TribecaNew York-based Goldman has decided to shut down its Principal Strategies group, which accounts for some 10% of its annual revenue, following the enactment of the Volcker rule, which bars banks from proprietary trading. Firms have up to four years to comply, and Goldman will hold off on announcing the closure to give the roughly 70 members of its team time to find new jobs.

Some of those traders will undoubtedly remain with Goldman. Some others—members of the Asia team—are likely to join a hedge fund founded by Morgan Sze, the head of Goldman’s Asia prop. desk. The New York-based prop. traders are in talks to join an asset management firm, Bloomberg News reports.

Early reports indicated that Goldman might spin-off the Principal Strategies division as a hedge fund, although it appears that was never a serious option. Plans to spin-off Sze’s Asia team as a separate hedge fund also went nowhere.


In Depth

Malik: The Science of Deal Sourcing 201

Aug 27 2015 | 5:35pm ET

Deal sourcing is understandably a hot topic among private equity firms because it...

Lifestyle

Rolling Art Advisors Marketing Collectible Car Fund As Uncorrelated Alternative

Aug 27 2015 | 6:47pm ET

A new fund is trying to provide investors with greater access to an emerging asset...

Guest Contributor

Agecroft Partners: Hedge Fund Industry Assets to increase $250B by Summer 2016

Aug 11 2015 | 11:29am ET

Assets will continue to flow into the hedge fund industry despite long-standing...

 

Editor's Note