Products January 5, 2001

Goldman Forms Fund of Hedge Funds

May 1, 2001 (PLANSPONSOR.com) - Investment bank Goldman Sachs will launch a fund made up of hedge funds in July. The fund of funds will be marketed primarily towards its institutional clients.
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The firm aims to construct a diversified portfolio of between 15 and 20 independent hedge fund managers following a variety of styles, such as

  • merger arbitrage
  • statistical arbitrage
  • convertible arbitrage
  • fixed-income arbitrage
  • equity market neutral.

Portfolio managers of the new fund will screen and select the individual hedge funds they believe will perform best.

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They will aim for annualized net returns of between 10% and 12% over a three to five-year time horizon with low correlation to the equity and fixed income markets.

Minimum investment in the fund is $1 million, with a 1% management fee for investments up to $5 million. The fee falls to 0.8 % for investments between $5 million and $25 million and to 0.6% for those larger than $25 million.

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