Goldman Sachs leads in hedge-fund sprint

Date: Monday, December 4, 2006
Author: Riva Froymovich, InvestmentNews.com

Goldman Sachs Group Inc. is the largest manager of hedge fund money, with $29.5 billion in assets, according to data compiled by Chicago-based Hedge Fund Research Inc. and Bloomberg News.

The study ranked the hedge funds in six investment strategies: emerging markets, distressed, event driven, long/short equity, fixed income and macro.

The hedge fund universe has more than doubled in size since 2000, with more than 9,000 hedge funds holding $1.34 trillion in assets, said Bloomberg.

And $110.7 billion was invested into hedge funds during the first nine months of 2006. Large banks are catching on.

Morgan Stanley, for instance, bought stakes in two hedge-fund firms and directly purchased a third, Bloomberg reported.

Their research showed that the proliferation of hedge funds though has led to some struggling for standout profits.

As of September 30, the average hedge fund was up 7.1% in 2006, Bloomberg reported.

In context, an investor Standard & Poor's 500 Index returned 8.5% through September. Plus hedge funds charge investors on 2% of assets and 20% of profits usually, the report said.