Goldman CFO says its funds held up well in Q4
Tue Dec 16, 2008 1:14pm EST
By Joseph A. Giannone
NEW YORK, Dec 16 (Reuters) – Goldman Sachs Group Inc (GS.N: Quote, Profile, Research, Stock Buzz) Chief Financial Officer David Viniar said the company’s asset management division performed “pretty well” during the fourth quarter despite a brutal environment, but warned that hedge fund assets were likely to shrink in the coming year.
“Our asset management business performed pretty well,” Viniar told reporters during a briefing Tuesday. “It would be impossible not to have depreciation when equity indices are down 40 percent across the board. Other than that, the performance kind of reflected what was happening in the world.
Across the industry, he noted, investors pulled money from equity funds and fled to safer cash-like money-market investments.
Assets under management fell to $779 billion from $863 billion, reflecting $90 billion of market depreciation and $6 billion of inflows. Excluding money market balances, clients pulled out $5 billion of assets from Goldman’s equity, fixed income and hedge funds.
Viniar said Goldman had mixed results from some of its newly launched funds. Liquidity Partners, a distressed debt investment fund, “was into the credit businesses too early. It has not done well.”
But on a relative basis, Goldman Sachs Investment Partners — a long-short hedge fund managed by a team of proprietary traders who switched over from managing the firm capital — has done “just fine” with a 14 percent to 15 percent decline.
“That’s probably above the median for equity long-short funds. No one is pleased with it, but given the environment we’re in, it’s done okay.” (Editing by Jeffrey Benkoe)