August 7, 2007 / 8:08 PM / in 10 years

UPDATE 1-Goldman denies talk of Alpha fund liquidation

(Adds comment from Goldman in New York, background)

NEW YORK/LONDON, Aug 7 (Reuters) - Goldman Sachs (GS.N) on Tuesday denied market talk that it was liquidating its Global Alpha hedge fund, amid a report that the fund had fallen 12 percent in two weeks.

Earlier, several traders said there was persistent market talk that the fund was being wound down, and that it was selling large amounts of stock in German car parts supplier Continental (CONG.DE), aerospace company EADS EAD.PA and Italian carmaker Fiat FIA.MI.

Bloomberg reported that the Alpha fund had fallen 12 percent in the two week period ended August 3, and was down 16 percent for the year.

The Alpha fund aims to generate returns that are not correlated to the Standard & Poor’s 500 index. But the risk the fund takes on, as measured by the volatility of its returns, is supposed to be similar to the S&P 500, a fund of funds investor said.

The fund invests mainly in liquid assets, and should be able to sell assets to meet investor redemption demands, the investor said.

A Goldman spokesperson in London declined to comment on the fund’s position in those individual stocks. Goldman spokesman Peter Rose in New York declined to answer any questions about the fund, citing U.S. regulations surrounding hedge funds.

    Underperformance by Global Alpha’s managers put a dent in Goldman’s first-quarter results. Fund management incentive fees for the asset management group fell 78 percent to $23 million from $105 million a year earlier, and much of that was driven by Alpha, analysts said.

    (Reporting by Dan Wilchins and Joseph Giannone in New York and Sitaraman Shankar and Michael Taylor in London)

    ((Editing by Leslie Gevirtz; Reuters Messaging:; +1 646 223 6320)) Keywords: GOLDMAN ALPHA/

    C Reuters 2007. All rights reserved. Republication or redistribution ofReuters content, including by caching, framing or similar means, is expresslyprohibited without the prior written consent of Reuters. Reuters and the Reuterssphere logo are registered trademarks and trademarks of the Reuters group ofcompanies around the world.nN07231281

    0 : 0
    • narrow-browser-and-phone
    • medium-browser-and-portrait-tablet
    • landscape-tablet
    • medium-wide-browser
    • wide-browser-and-larger
    • medium-browser-and-landscape-tablet
    • medium-wide-browser-and-larger
    • above-phone
    • portrait-tablet-and-above
    • above-portrait-tablet
    • landscape-tablet-and-above
    • landscape-tablet-and-medium-wide-browser
    • portrait-tablet-and-below
    • landscape-tablet-and-below