Aug 4 Goldman Sachs Group Inc is jettisoning less-profitable hedge-fund clients and raising fees on others as it tries to adapt to new banking rules, the Wall Street Journal reported on Monday, citing people familiar with the matter.
The bank has told hedge fund clients the regulations have forced it to set aside more capital, crimping profits at its prime-brokerage business, which executes and finances the funds' trades, the newspaper said.
The investment bank is also pulling the firm's own cash out of its largest internal hedge fund to comply with the new regulations, the Journal reported, citing sources. (on.wsj.com/1s6mKyj)
Goldman Sachs was not immediately available for comment.
The move is part of an attempt by Wall Street banks to scale down from capital-intensive businesses in order to comply with stricter capital requirements by U.S. regulators.
Goldman is urging funds to take back the cash they hold in their accounts, charging clients more to finance trades and imposing monthly fees more often on fund managers for maintaining untapped credit lines with the bank, the Journal said.
In some cases, Goldman has stopped serving clients that produce little or no returns for the firm, according to the Journal. (Reporting by Sudarshan Varadhan in Bangalore; Editing by Lisa Shumaker)