Goldman Sachs, considered one of Wall Street's most prestigious investment banks, said Monday it had teamed up with a group of investors to lead a three-billion-dollar bailout of a hedge fund it manages.
Goldman said the bailout of the Global Equity Opportunities (GEO) hedge fund it manages came after recent financial market volatility caused the fund's performance to suffer dramatically.
"Given the market dislocation, the performance of GEO has suffered significantly. Our response has been to reduce risk and leverage," Goldman Sachs said. Goldman said the group of investors who have clubbed together to offer a financial lifeline to the distressed hedge fund include C.V. Starr & Co, Inc, Perry Capital LLC and Eli Broad.
"We consider this an attractive investment opportunity. Existing investors in the fund will also have the opportunity to participate," Goldman said. "The investment will also provide the fund with more flexibility to take advantage of the opportunities we believe exist in current market conditions," it said.
Goldman Sachs, which is also viewed as one of Wall Street's smartest banking institutions, is not the only major US bank and trader to be hit by financial market turbulence that has swept the globe.
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