Global Alpha’s Annus Horribilis

Nov 19 2007 | 12:07pm ET

A month after Goldman Sachs said it would not shutter its flagship hedge fund, the full extent of the damage to Global Alpha is becoming apparent.

Once known as the Cadillac of hedge funds—Global Alpha returned almost 40% two years ago—the fund is now down by almost as much in 2007. Global Alpha’s year-to-date loss stood at 37% on Nov. 14, Bloomberg News reports. That decline, coupled with investors fleeing the falling fund, may see its assets, which stood at $10 billion at the beginning of the year, fall to $4 billion.

Most of Global Alpha’s losses came in August, when it sank 22.5%. But unlike other quantitative funds, notably Renaissance Technologies, there’s been no bounceback for the famed fund, managed by Mark Carhart and Raymond Iwanowski.

In September, Carhart and Iwanowski told investors that they were “actively working” to speed up investment changes and slash leverage. At the time, the fund was managing $6 billion. Since then, Goldman has received some $2 billion in fourth-quarter redemption notices.


In Depth

Debunking Conventional Investment Wisdom

Feb 8 2017 | 3:22pm ET

Due diligence in the hedge fund world has long involved some combination of the...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

The Future of Private Equity: New Opportunities, New Challenges

Feb 3 2017 | 6:41pm ET

The private equity industry’s astonishing rebound since the financial crisis has...

 

From the current issue of