Goldman Sachs’s leading hedge fund Global Alpha made a 5.7 per cent loss in February.
The loss came as reports in March showed that Goldman had dropped a place to become the second largest hedge fund manager in the US with $32.5 billion of assets under management.
It is thought that Global Alpha’s performance was impaired by a series of wrong bets on global bonds and currencies, based on perceptions that the Japanese Yen and Norwegian Krone would decline. In fact, both currencies were up 1.8 per cent against the dollar.
However, commenting on the figures to Bloomberg, David Nelson of DC Nelson Asset Management stressed that the fund’s strategy meant that the loss was not as significant as it may seem. “This is a macro fund making big bets, and they stumbled. Volatility isn’t unusual for this kind of fund because they want to have huge, double-digit years. As an investor I would not be concerned until mid-year,” he said.
The latest setback for Global Alpha follows a loss of 9 per cent in 2006, having recorded a 40 per cent increase in the previous year.
Last week Goldman’s head of hedge fund strategies for Europe and Asia at Goldman’s Dynamic Opportunities Fund announced she would be resigning from her position.