Saturday, 22 October 2016
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Jan 11 2013 | 1:18pm ET
Goldman Sachs has taken an ownership stake in a hedge fund founded by a former trader, six years after helping the firm get off the ground.
Cantab Capital Partners, led by former Goldman quantitative trader Ewan Kirk, last year restructured its licensing agreement with the bank. Cantab had paid Goldman a share of its profits for use of its technology since its launch in 2006, but Goldman has given up the payment in exchange for a minority stake in the firm, Cantab said.
The Cantab stake is held by the bank, and not by its Petershill private equity fund, which invests in hedge fund managers.
The new arrangement comes as Cantab sets up its own information technology system, Kirk told investors in a letter. "As part of this, the existing profit-share arrangement with Goldman Sachs has been amended and as from December 31, Goldman Sachs will become a partner," Kirk wrote.
It is unclear how large a stake Goldman now owns. The bank does not invest in Cantab's hedge funds and did not pay for the stake.
Cambridge, U.K.-based Cantab has posted two double-digit gains in a row, rising 15% last year and 13% in 2011. The firm in November closed to new investors at US$4.5 billion; it now manages approximately US$4.7 billion.