Goldman Unveils Plans For Two Credit Hedge Funds

Nov 14 2007 | 7:28am ET

Goldman Sachs CEO Lloyd Blankfein said the Wall Street giant has raised one hedge fund and plans another to capitalize on the credit crunch.

Blankfein said Goldman has raised $2.7 billion for credit hedge fund Liberty Harbor and expects to launch a long/short hedge fund, both designed “to take advantage of distressed opportunities in the credit markets,” he told the Merrill Lynch Banking & Financial Services Conference.

“As you know, we’ve had issues with the performance of certain of our quantitative funds, as have others in the space,” Blankfein said, referring to the widely-publicized losses in its flagship Global Alpha fund, as well as its Global Equity Opportunities and North American Equity Opportunities funds. “While direct quantitative hedge funds represent only 5% of our assets under management, we realized it would be prudent to further expand our product portfolio in actively-managed strategies.”

The long/short fund, expected to launch in the next few months, is to be managed by traders who ran a similar fund at Goldman.

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