Ex-Global Alpha Head Founds Alternative Beta Hedge Fund

Oct 16 2009 | 2:31pm ET

Six months after his departure from Goldman Sachs’ flagship hedge fund, Mark Carhart is getting back into the alternative investments business.

Carhart, who, along with Raymond Iwanowski, managed Goldman’s Global Alpha fund to unprecedented success before hitting the skids three years ago, plans to raise $1 billion for a new alternative beta hedge fund, he told Reuters.

Carhart’s new fund is set to launch next year; his non-compete agreement with Goldman doesn’t expire until April. Like Global Alpha, the new fund will employ a quantitative strategy. But unlike many quant funds, the new vehicle will target risk premiums, rather than market inefficiencies, Carhart said.

“It’s meant to supplant a large portion of hedge funds which don’t have as much alpha as they do a lot of embedded beta,” Carhart told Reuters.

Carhart is targeting institutional investors with the new “exotic beta” fund, and hopes to build it assets to as much as $5 billion.

Carhart, who in addition to running Global Alpha was co-chief investment officer of Goldman’s quantitative equity strategies group, and Iwanowski retired from Goldman in April, along with Giorgio De Santis, co-head of research at the quant group. It is unclear if either man will join Carhart’s new firm.

Their departure came after Global Alpha’s run of unprecedented success  came to a crashing halt in 2007. The once-$12 billion lost 40% that year, and continued to lose money and assets last year into this year.

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