Goldman Launches $1 Billion Seeding Fund

Dec 1 2011 | 1:02pm ET

Goldman Sachs has launched a hedge fund seeding fund, with plans to raise about $1 billion.

The new fund, managed by Kent Clark in New York and Ali Raissi in London, has already made its first investment, handing $100 million to a new hedge fund founded by veterans of SAC Capital Advisors and TPG-Axon Capital Management. The new fund plans to invest in between seven and nine other hedge fund startups, The Wall Street Journal reports.

In an effort to avoid the strictures of the new Volcker rule, the new fund, part of Goldman Sachs Asset Management's fund of hedge funds business, will not use any of the bank's own money. Instead, it has raised $600 million from institutional investors and wealthy clients.

Managers picked by Clark and Raissi will get between $75 million and $150 million each. It is unclear what cut of a new firm's fees the Goldman fund will be taking.

The first fund in Clark and Raissi's stable is Palestra Capital Management, founded earlier this year by Andrew Immerman, formerly of SAC's CR Intrinsic unit, and Jeremy Schiffman, formerly of TPG-Axon. The long/short equity fund is expected to debut in the first quarter.

Palestra, named for the legendary basketball arena at the founders' alma mater, the University of Pennsylvania, has also secured seed funding from TPG-Axon.


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