Herald Tribune – The $10 billion flagship hedge fund at Goldman Sachs Group dropped 11.6 percent this year through the end of November as its managers misjudged the direction of global stock andcurrency markets, according to two investors.
The fund, called Global Alpha Fund, lost money partly on bets that equity markets in Japan would rise, that stocks in the rest of Asia and the United States would fall and that the dollar would strengthen, the investors said. In August, the fund lost almost 10 percent on unprofitable investments in global bond markets.
Goldman, based in New York, is the largest hedge fund manager in the world, with $29.5 billion in assets.
Global Alpha, managed by Mark Carhart and Raymond Iwanowski, is designed to make big, risky wagers, which can produce large returns as well as large losses. Other so-called macro funds, which bet on global stocks, bonds, currencies and commodities, are up an average of about 7 percent this year through November, according to Hedge Fund Research of Chicago. Last year, Global Alpha returned almost 40 percent, said the investors, who declined to be identified.
