Goldman Hedge Fund Can Keep Bank Stake, Fed Says

Mar 15 2011 | 2:49am ET

Goldman Sachs will be allowed to keep its stake in a Tennessee bank because it is held by a bank-owned hedge fund.

The Federal Reserve has approved Goldman's application to keep its nearly 10% voting stake in Avenue Financial Holdings, which is actually held by hedge fund Goldman Sachs Investment Partners. The Fed's okay is needed for a bank holding company to own more than 5% of the voting shares of a bank, and Avenue Financial owns Avenue Bank.

The regulator noted that the Avenue stake is held by a Goldman hedge fund, which made the purchase before Goldman became a bank holding company in September 2008, as a passive investment. According to the Fed, Goldman has promised to keep it that way.

"Goldman has committed not to exercise or attempt to exercise a controlling influence over the management or policies of Avenue or any of its subsidiaries," the central bank said in a statement. The approval "is specifically conditioned on compliance by Goldman with the conditions imposed in this order and the commitments made to the Board in connection with the application."

Avenue received $7.4 million in federal bailout money and has yet to repay it.


In Depth

Q&A: High Conviction, Low Correlation

Oct 30 2014 | 7:35am ET

Acadian Asset Management's numbers are big: over $70 billion in assets under management...

Lifestyle

Ex-Hedgie Steyer Gives $56M To Climate Action Super PAC

Oct 28 2014 | 9:23am ET

Retired Farallon Capital founder Tom Steyer has poured almost $56 million into his...

Guest Contributor

Hedge Funds Weather A Data Management Perfect Storm

Oct 22 2014 | 12:28pm ET

From a regulatory standpoint, nearly every development since the crisis has placed...

 

Videos

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

October 2014 Cover

Demeter: Family affair

David and James Hamman launched their fundamental Livestock and Grains Program in March of 2010 but it really was decades in the making.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.