Goldman's Alpha hedge fund to end year with $4 bln

BOSTON, Nov 21 (Reuters) - Goldman Sachs Group Inc (GS.N). has told investors it expects its Global Alpha hedge fund will end the year with roughly $4 billion in assets, about 60 percent less than in January, several people familiar with the matter said.

The fund, a so-called quantitative portfolio that relies on computer models to make big bets, suffered losses amid the ongoing credit market turmoil that also hurt other prominent hedge funds. On top of that, some investors in the Alpha fund asked for their money back.

Goldman Sachs' fiscal year ends on Nov. 30.

The steep loss marks an embarrassment for the prominent Wall Street securities firm, which has trained many of the world's most successful hedge fund managers early in their careers.

One person familiar with the Alpha fund who was not authorized to speak about it publicly said recent redemption notices were heavier than initially anticipated.

That person also said Goldman has signaled it has no plans to wind the fund down.

Historically, smaller hedge funds had been thought to perform better because they are considered to be more nimble.

The securities firm declined to comment on the matter.

Last week, Goldman Sachs chief executive Lloyd Blankfein said the firm plans to expand in the distressed debt area and will launch a new long-short hedge fund that will be launched in the next months.

Changes have already been promised at the Alpha fund with the firm telling investors in September the fund would constrain its borrowing in the future and consider the level of borrowing as a separate risk factor. (Reporting by Svea Herbst-Bayliss and Joseph Giannone; editing by Andre Grenon)