Goldman makes $300m from fund rescue
By James Mackintosh in London
Published: September 6 2007 20:52 Last updated: September 6 2007 20:52
Goldman Sachs made $300m last month from the rescue of one of the investment bank’s troubled hedge funds, even as external investors lost more than a fifth of their money.
The bank’s Global Equity Opportunities fund, into which it injected $2bn of its own money as part of a $3bn bail-out in the middle of last month, recovered strongly after the rescue but still underperformed badly for August as a whole.
The paper profit positions Goldman as one of the big beneficiaries of last month’s credit squeeze, although the bank is also likely to suffer from widening credit spreads and a drop in the value of debt it has not yet syndicated.
It will also boost quarterly profits for the bank when it reports results for the three months to the end of August in a fortnight.
Hank Greenberg, former chairman of AIG, hedge fund Perry Capital, and Eli Broad, the US billionaire, participated along with other investors in the rescue, which involved injecting $3bn into the fund after it lost a third of its value in a week.
GOIH Commentary:
Notice they didn't say "HOW" GS made the "$300 million"...ummmm