Goldman Prop. Traders’ Hedge Fund To Debut In Late 2011

Nov 4 2010 | 8:48am ET

The Goldman Sachs proprietary traders set to join Kohlberg Kravis Roberts in January won’t launch their first hedge fund until later in the year.

Scott Nuttall, who heads the private equity firm’s global capital and asset management group, said on a conference call with analysts yesterday that the firm will “go out and talk to third-party investors about investing in the platform” set up by the nine-member group, led by Robert Howard, head of Goldman Sachs Principal Strategies in the U.S.

But Nuttall warned that most of next year would be spent setting up that platform, and that KKR would only begin to seek outside money “once we’re ready.”

That will likely be “sometime next year, but probably the later part of next year,” Nuttall said. “It will take a while” for the group to get started, “and once they do start we’ll need to set up operations and IT, etc.”

He added that Howard’s group would be fully integrated into KKR’s asset management business and would build a long/short equity strategy to complement the firm’s existing credit team.

“While we may feed the group with capital off the balance sheet, it will be a reasonably modest amount of capital,” he said.

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