Goldman Starts Redeeming Hedge Fund Stakes

May 10 2012 | 12:35pm ET

Goldman Sachs has begun to step back from hedge funds as required by the U.S.'s new Volcker rule.

The Wall Street giant said it had redeemed $250 million of its hedge fund investments in the first quarter, a little more than 7.5% of its total hedge fund portfolio. The firm now has about $3.06 billion in hedge fund investments.

Goldman said in its filing that it planned to "redeem up to approximately 10% of certain hedge funds' total redeemable units per quarter over 10 consecutive quarters," until the second quarter of 2014. The bank has also endeavored to remain at or under one of the Volcker rule thresholds, limiting "the firm's initial investment to 3% for certain new funds."

The Volcker rule bars banks from proprietary trading and limits them to holding no more than 3% of any one hedge or private equity fund's assets or from investing more than 3% of its Tier 1 capital. All told, Goldman owns stakes totaling $17.2 billion with further commitments of $7.77 billion, including nearly $12 billion in private-equity investments and commitments.

Goldman said it "continues to manage its existing private-equity fund taking into account the transition periods under the Volcker rule." Those investments aren't redeemable, but Goldman said it expects that "substantially all of the underlying assets of the existing funds will be liquidated over the next 10 years."


In Depth

Q&A: Brevan Howard’s Charlotte Valeur Talks Strategy

Sep 18 2014 | 11:18am ET

Charlotte Valeur chairs the board of Brevan Howard Credit Catalysts, an LSE listed...

Lifestyle

Hedgies Rock Out For Children's Charity

Sep 15 2014 | 8:40am ET

It's that time of year again—when hedgies trade in their spreadsheets for guitars...

Guest Contributor

Volkered: How Financial Sector Reforms are Creating Opportunities for Hedge Funds

Sep 16 2014 | 11:28am ET

New regulations have dramatically curtailed proprietary trading activity in investment...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

September 2014 Cover

The London Whale: Rogue risk management

Credit default swaps brought down the London Whale and cost JPMorgan $6.2 billion. Here is how it happened.

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.