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

Related-Company Fees: Normal Industry Practice or Conflicted Compensation?

Nov 11 2015 | 4:23pm ET

Regulatory agencies as well as investors are increasingly exploring whether certain...


Ferrari Roars in Wall Street Debut

Oct 21 2015 | 4:28pm ET

Shares of supercar maker Ferrari jumped as much as 15 percent to a high of nearly...

Guest Contributor

Private Debt - What is the Opportunity?

Nov 11 2015 | 3:28pm ET

In this contributed article, Rob Allard, founding partner of Firebreak Capital...


Editor's Note

    Oct 21 2015 | 10:41am ET

    One of the most unique charity benefits in the hedge fund industry, A Leg To Stand On's (ALTSO's) Hedge Fund Rocktoberfest - NYC, raised nearly $500,000 last Thursday thanks to the generous support of major sponsors and nearly 1,400 attendees from the Tri-State finance, business and hedge fund communities. Read more…