Goldman Starts Hedge Fund Stake Selloff

Mar 8 2012 | 1:18pm ET

Goldman Sachs has begun a more-than-two-year process to cut its hedge fund investments to comply with the Volcker Rule.

In a letter to the Securities and Exchange Commission last year—but only posted by the regulator last week—Goldman said that it would redeem up to 10% of its stakes in certain hedge funds each quarter from this month until June 2014. It did not say which hedge and private equity funds would be affected; some of its investments in those funds are already below the Volcker rule maximum of 3% of assets in any given fund.

At the end of last year, Goldman had $3.2 billion invested in hedge funds, compared to $20 billion in total client assets in hedge funds at its asset management unit. Some of Goldman's investments are in outside hedge funds.

Goldman laid out its plans after the SEC in May of last year asked the bank to update it on its progress towards compliance with the Volcker rule. "We plan to review these expectations when the detailed scope of the prohibitions, permitted activities, exceptions and exclusions related to sponsoring and investing in private equity and hedge funds are known with certainty," Goldman responded on June 30.

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...


U.S. Trust's Beard: The Rapid Growth of the Art Lending Industry

Oct 7 2016 | 10:55pm ET

Alternative investment managers have emerged as some of the most significant art...

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...