Reuters – Weak performance in Goldman Sachs Group’s flagship hedge fund this year could put a dent in the bank’s first-quarter results, Chief Financial Officer David Viniar told investors Tuesday.
Goldman’s $10 billion Global Alpha hedge fund is down roughly 12 percent this year, according to press reports. Viniar, who alluded to the reports during the bank’s fourth-quarter conference call, acknowledged that Goldman’s incentive fees fell dramatically in the fourth quarter.
He also said they could suffer even sharper declines in the first fiscal period of 2007.
“I think you read in the papers this past week that some of the hedge funds in our alternative investments part of Asset Management have not been performing great and that’s really been driving the incentive fees down,” Viniar said.
Goldman, which said it nearly doubled fourth-quarter profit to $3.15 billion, said fund-management incentive fees plunged 78 percent to $23 million from $105 million a year earlier.
