Next Goldman Hedge Fund An Inside Job

Goldman Sachs is creating a potential win-win situation itself with the launch of new hedge fund by star trader Raanan Agus. The yet-to-be-named, reports the International Herald Tribune, will be a bit unusual in that basically it’s an inside job: Agus, who heads the firm’s equity proprietary trading desk (which the firm calls principal strategies), will not follow the paths of his predecessors out the door to seek his fortune, but will relocate somewhere in the firm as part of GS’ asset management division, along with part of his current team. As IHT sees it, Goldman Sachs benefits in three ways from the arrangement: It provides the firm with a fund for clients to invest in, it generates a flow of fees from the fund and it gives Goldman the ability to up the money it puts at risk. Another fund in-house means clients will have more options at Goldman Sachs and won’t have to look elsewhere. Add to all this the 2/20 fees (even if it doesn’t perform well, it still reaps management fees) and Goldman has a potential gold mine on its hands. Joining Agus in his new venture is Kenneth Eberts, who heads U.S. investments for principal strategies, the entire Tokyo-based principal strategies team and half of its U.S. counterpart. The new long/short fund, which will become another Goldman Sachs Asset Management product, could raise as much as $10 billion, mainly from Goldman Sachs, its private clients and outside investors, says IHT, citing people familiar with the fund.