Goldman denies top boss quit due to bad results

5 March 2008

A top manager at a poorly-performing Goldman Sachs hedge fund is leaving for a different position, but the firm denies that the shift is due to bad results under his management.

Peter Kraus, co-head of investment management at the Global Alpha hedge fund, will step down from his position at the end of March after eight years in the job.

Chief executive officer Lloyd Blankfein wrote in a memo that the 55-year-old would be moving on to become a senior director.

The value of Global Alpha dropped by 40 per cent last year, but sources told the Financial Times that Mr Kraus' departure had nothing to do with this.

Mr Kraus has been at Goldman Sachs for nearly 22 years in total in various different roles and helped to create one of the biggest investment management divisions in the world from relatively humble beginnings.

Despite enjoying an average annual growth of 30 per cent for the past decade, last year Global Alpha was not as prosperous - largely due to panicked investors withdrawing their money amid credit crunch fears.

Although Goldman has denied that the performance of the fund was related to the job shift, Kraus is not the first top executive to leave the investment management arm in recent months.

In June Goldman announced that Eric Schwartz, who had served at the securities firm for 23 years, was quitting his role as co-head of the division, where he had been working alongside Mr Kraus.

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