'Nearly $1bn' wiped off flagship Goldman Sachs fund

6 November 2008

A "flagship" Goldman Sachs hedge fund has revealed losses of $989 million between its launch in January and September, according to reports.

Goldman Sachs Investment Partners (GSIP) raised around $6 billion when it first opened at the start of the year but new figures cited in the Financial Times show the fund's third quarter returns have dropped by 13 per cent.

The main driver of its losses has been crashing asset prices, which have battered hedge funds across the board, the publication added.

Around half of GSIP's third-quarter damage has been caused by diving returns from commodities, metals, mining, energy, agriculture and basic materials.

Losses have also been linked to convertible assets. The fund's managers, Raanan Agus and Kenneth Eberts, told the publication that returns in this area have been "abysmal".

"GSIP is not alone in producing disappointing returns this quarter and this year. We anticipate that these results will lead to net outflows from the hedge fund industry," they added.

According to recent figures from Hedge Fund Research, the average hedge fund has declined 19 per cent in 2008.

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