Goldman Makes Final Redemption Requests As Volcker Looms

Nov 6 2014 | 3:43pm ET

Goldman Sachs has moved to exit all of its liquid hedge-fund investments.

The bank redeemed $285 million from hedge funds in the third quarter. It also filed redemption notices for its remaining hedge-fund investments, excepting illiquid ones, totaling about $375 million.

Goldman has pulled $2.55 billion from hedge funds over the past two-and-a-half years. The Volcker rule, which comes into effect next year, puts strict limits on the amount that banks can have invested in alternative investments.

Goldman still has $11.4 billion in hedge and private-equity funds. It will have to seek extensions to hold onto its illiquid positions.

“To the extent that the underlying investments of particular funds are not sold, we may be required to sell our investments in such funds,” Goldman said. “If that occurs, we may receive a value for our investments that is less than the then-carrying value as there could be a limited secondary market for these investments and we may be unable to sell then in orderly transactions.”

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