Goldman pumps $3B into flailing fund

Goldman Sachs’s Global Equity Opportunities fund lost $1 billion last week, prompting a $3 billion injection.
AUG 13, 2007
The Goldman Sachs Group Inc. and a group of investors today injected $3 billion into a suffering hedge fund. Goldman Sachs’s Global Equity Opportunities fund lost $1 billion last week, prompting a $3 billion injection from the bank and investors, including C.V. Starr & Co Inc., Perry Capital LLC and Eli Broad. Funds employing quantitative strategies, which combine long equity positions and short trades, were hit especially hard during last week’s market frenzy. Goldman Sachs also said that its Global Alpha and North American Equity Opportunities funds have also experienced losses from the market, leading bank to cut back on risk and leverage in the funds. Despite having experienced major losses from the stock markets last week, hedge funds may have been behind the global market volatility, sources in London’s market district told the Telegraph. Major investment banks, including Goldman Sachs, Lehman Brothers and Merrill Lynch, raised margin calls on hedge funds who borrow money from them, forcing the funds to settle a lot of debt, sources told the Telegraph. In a panic, the funds sold their assets in order to cover their losses, spiking fears that the hedge funds were on the verge of collapse, the Telegraph said.

Latest News

People moves: RBC taps Raymond James veteran for Texas complex
People moves: RBC taps Raymond James veteran for Texas complex

Meanwhile, DPL Financial Partners adds two annuity executives and Prime Capital Financial hires a Mid-Atlantic retirement plan consultant

Ex-LPL, special needs advisor pleads guilty in fraud case
Ex-LPL, special needs advisor pleads guilty in fraud case

Andrew Komarow pleaded guilty Thursday in federal court in Hartford to defrauding three financial services companies of close to $3.3 million.

Advisor moves: Raymond James lands $700M Truist team in Naples
Advisor moves: Raymond James lands $700M Truist team in Naples

Elsewhere, Cetera picks up a $210 million Connecticut team from MML, while Wells Fargo FiNet adds a San Diego family practice from LPL

Investor accuses Lasater Capital of hiding $100M in fund defaults
Investor accuses Lasater Capital of hiding $100M in fund defaults

Celebrity endorsements, $500M in claimed assets, and a state regulator stepping in.

American Express to make job cuts as AI revolution ramps up
American Express to make job cuts as AI revolution ramps up

“We needed to become a more agile and efficient organization,” said American Express CEO Stephen Squeri.

SPONSORED Built on insurance experience to deliver on long-term promises

Knighthead Life entered the market with a competitive MYGA. A strong launch earned advisor confidence and paved the way for FIAs.

SPONSORED In the Age of AI, Trust Becomes the Advisor's Greatest Asset

As AI makes financial information more accessible than ever, Lana Hock explains why human judgment, trust, and empathy remain the qualities clients value most in a financial advisor