Global Alpha Tumbles In Feburary

Apr 4 2007 | 12:21pm ET

Has the Cadillac of hedge funds become a lemon?

Goldman Sachs’ once high-flying flagship hedge fund, Global Alpha, took a big hit in February, falling 5.7% while most hedge fund indices showed positive or flat returns. Bad bets on currencies, stocks and global bonds leave the fund, helmed by Mark Carhart and Raymond Iwanowski, down 2% for the year. The fund fell by 9% last year, the first down year in its seven-year history.

“The U.S. equity market-neutral strategy was down for the month,” the managers wrote in their monthly investor update, Bloomberg News reports. “The stocks/bonds/cash-timing strategy detracted from overall performance due to our short position in global bonds.”

The fund also bet against the Japanese yen and Norwegian krone in February, both of which rose about 2% against the dollar. But the decline was limited by bets on rising bond prices in the U.S. and Australia.

“Several of our funds are particularly volatile, as we have strived on behalf of our clients to optimize for capital efficiency,” the update explained. “Because hedge-fund products are complex, we believe no single metric on its own can comprehensively provide an assessment of the risks investors face.”

Returns, by contrast, are unmistakably hard and comprehensive.

In Depth

Financial Industry Blockchain Consortium R3 To Open-Source Platform Code

Oct 20 2016 | 9:03pm ET

Bitcoin's blockchain technology has spawned a flurry of activity among fintech startups...


Hedge Funds Swarm Into Palm Beach

Oct 27 2016 | 2:32pm ET

As the first flakes of snow fall on New York's northern suburbs, Dan Weil of South...

Guest Contributor

Hedge Fund Marketing – Tips for Your Initial Sales Meeting

Sep 29 2016 | 5:46pm ET

There are two main goals a hedge fund should have for an initial in-person sales...