Goldman Sachs will use $2bn of its own money and an additional $1bn from outside investors to bail out its $3.6bn Global Equity Opportunities hedge fund, in an embarrassing admission that its highly regarded computerised funds malfunctioned last week, losing about $1.5bn amid the market turbulence. The new investors include Hank Greenberg, former chairman of AIG, hedge fund Perry Capital and Eli Broad, the billionaire. From a Goldman perspective, says Lex, the cash injection may well turn out to be a canny move; for Wall Street as a whole, though, and on the heels of the Bear Stearns move to lend to its troubled fund, the Goldman decision raises potentially troubling issues.

This entry was posted by Gwen Robinson on Tuesday, August 14th, 2007 at 5:47 and is filed under Capital markets, Hedge funds. Tagged with bear stearns, goldman sachs. Edit this entry.