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

The Benefits Of Private Debt Investing

May 7 2015 | 10:43am ET

Jeffrey Haas is chief operating officer of Old Hill Partners Inc., an SEC-registered...

Lifestyle

Yale Receives $150 Million Gift from Blackstone’s Schwarzman

May 12 2015 | 12:10am ET

Yale University announced it has received a $150 million gift from Blackstone Group...

Guest Contributor

How To Generate 6% Yield In A Volatile World

May 22 2015 | 6:41am ET

Private credit comes in many different flavors, all with the common themes of over...

 

Editor's Note