$7 Billion Goldman Hedge Fund Down 15.5%

Nov 4 2008 | 1:36am ET

Goldman Sachs’ first stock-picking hedge fund isn’t faring any better than its flagship quantitative offerings.

Goldman Sachs Investment Partners, which debuted in January with about $7 billion, making it one of the largest hedge fund launches in history, has lost almost $1 billion of that since then. The fund lost 13% during the third quarter, leaving it down 15.5% on the year, the Financial Times reports. That amounts to a $989 million loss.

“We are disappointed with our performance,” managers Raanan Agus and Kenneth Eberts, told investors. “GSIP is not alone in producing disappointing returns this quarter and this year.”

Agus served as global head of proprietary trading at Goldman before launching GSIP. Eberts headed the firm’s U.S. prop trading desk.

Most of the fund’s third-quarter decline is attributable to its commodities, basic materials, metals, mining, energy and agriculture bets. But it also posted “abysmal” returns in its convertible bond portfolio.

On the bright side for Agus and Eberts, the 10-month-old fund has a two-year lockup, meaning that GSIP is in no danger of the huge redemptions ravaging much of the hedge fund industry.


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