Goldman pumps $3B into flailing fund

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.