Two Goldman Sachs funds launched to take advantage of the credit squeeze saw serious losses last month, according to a person familiar with the situation. Goldman's liquidity fund and its credit opportunities fund were meant to capitalize off bad situations, buying distressed assets in the credit and mortgage markets. Both were down in the high double digits for June, the person said.
GS Liquidity Partners was launched when the credit crunch first hit last fall, with $1.8 billion to make investments in distressed credit. The credit opportunity fund is a more recent creature, launched this year to invest in mortgage market dislocations.
Posted by guest , Jul 03, 2008 9:30AM
Is anyone surprised? Funds are buying up distressed assets way too early.
Posted by guest , Jul 03, 2008 9:33AM
Underreported news item with huge implications.
http://www.reuters.com/article/email/idUSN0148556720080702
Posted by guest , Jul 03, 2008 9:35AM
Yup heard about this. Doesn't make them look too smart. But doesn't make Goldman look as dumb as it did with Global Alpha either. The funds were well intentioned launches -- but they now appear to be only bottom fishers who, well, missed the bottom in the debt markets.
Posted by guest , Jul 03, 2008 9:44AM
@9:35
Goldman is still the smartest bulge bracket on the street and way smarter than numerous "smart money" hedge funds. If Goldman screwed up with these two funds, then I got to wonder how the other debt / distressed / bond arb funds are doing right now? Anybody heard of any other debt funds in trouble right now?
I was looking to make a move from restructuring i-banking analyst to distressed investing. So any leads on hiring debt funds that I could be worthy of let me know. I wanna be a hedge fund baller -- enough of the sell-side. I would love to join GOldman's funds if they are hiring - any idea how to make an approach, even if they are slightly down. I heard assets are increasingly flowing into distressed investing, I guess analysts too.
Any leeds, tips would be mucho appreciated.
-JLB.
Posted by guest , Jul 03, 2008 10:03AM
JLB, how many years exp. do you have & at what firm, as I may know someone who is interested in hiring on the distressed side?
Posted by CNote , Jul 03, 2008 10:10AM
It's just a matter of time before the next derivative iteration appears: Funds that invest in distressed funds that invested in distressed mortgage/consumer debt. How's it go - Good money thrown after bad?
Posted by guest , Jul 03, 2008 10:17AM
@10:03
Thanks for the post. Got almost two years at Miller Buckfire. you still interested?
Posted by guest , Jul 03, 2008 10:24AM
Goldman is still the smartest bulge bracket on the street and way smarter than numerous "smart money" hedge funds.
Damning with faint praise.
Posted by guest , Jul 03, 2008 10:26AM
@10:24
Agreed. Like being the tallest midget or the hottest girl in accounting.
Posted by guest , Jul 03, 2008 10:43AM
JLB, Sure. Send your resume to sid2828@gmail.com and I will forward on.
Posted by scerberus , Jul 03, 2008 10:46AM
It helps when you can see everyone else's trades.
There is no front-running. But there is thematic self correction "hey, these really smart people are putting on this trade...what are our guys doing?"
Posted by guest , Jul 03, 2008 10:47AM
Miller Buckfire... Is that even a real name?
Posted by Anal_yst , Jul 03, 2008 11:02AM
@ 10:47
Far as I can tell its the former restructuring group from Dredsner...
...anyone else feeling like death today, ughhhh
Posted by big r , Jul 03, 2008 11:50AM
anal - yes. MHL headache.
Posted by golden girl , Jul 03, 2008 12:45PM
Interestingly, GS's quant funds are having a strong year. Doesn't surprise me when you've cut down the assets so much, tho.
Posted by Anal_yst , Jul 03, 2008 12:46PM
@ Big R
vodka redbull headache, maybe a(some) lunch beer(s) will help it along...
Posted by guest , Jul 03, 2008 12:50PM
@10:24 & 10:26
You are both sore-ass losers who can only dream of working at Goldman and being baller like I am. You know anything of our culture of success? Our conspiracy to rule the world? Our Paulsons and Rubins? Go back to your boutique i-banks and dumb-ass jobs. We're the firm of BSDs.
-Goldman Baller
Posted by guest , Jul 03, 2008 12:59PM
12:50:
You're clearly some new analyst or intern who is just thrilled at getting through the golden arches of Goldman. Curb your arrogance dude. You might've got a 3.9 in some college and stellar interviews to land yourself this job but it doesn't mean you go ahead and call yourself a baller. Get some maturity and grow up before you call yourself a baller.
Posted by guest , Jul 03, 2008 1:26PM
A lot of smart people decided to try to make money off the "bottom" of this mess late last year. No one saw how deep the hole was. Quite a few people (including Jamie Dimon) predicted we were coming out of the credit crunch in the late spring. Instead, new problems appeared, compounding existing problems. No one's saying we're at the bottom now. It's like swimming in a lake that's spring fed; no one's quite sure how deep the waters are.
Posted by guest , Jul 03, 2008 1:29PM
@12:50
You obviously don't work at Goldman.
Posted by CNote , Jul 03, 2008 1:37PM
@1:29
Probably not - actually I'll bet the title on his card actually says "Hedge Fund Manager"
lllllllllinger longerrrrrrr
Posted by guest , Jul 03, 2008 1:42PM
Guest @ 9:33am. Yes, I saw a similar news item from Reuters yesterday. Dealbreaker did post without comment the Reuters link in Write-Offs yesterday evening.
Since people don't seem to get it, I'm going to summarize.
1. The Fed is going to issue a report on their valuation of the package of assets Bear Stearns gave them to secure the $29 billion in Fed financing that went to JP Morgan in the JP Morgan/Bear Stearns deal.
2. The Fed report is going to indicate the change of valuation (if any) in the past three months.
3. Since many banks hold billions of dollars of similar assets, the report will have implications of whether these types of assets have been priced appropriately, or whether further mark-downs may be required, in turn influencing the market's opinion of the solidity of the financial sector and certain individual institutions.
4. If the report values the assets at much less than $29 billion, there will be a whole new public debate about the role of the Fed in the JP Morgan/Bear Stearns deal or any other emergency situation requiring Fed financing.
5. Since the Fed is planning to release this report after the markets close prior to a long holiday week-end, what kind of news do you think the report contains?
Posted by guest , Jul 03, 2008 5:14PM
1:42:
I'm speechless.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aCDr9h0OSZtI&refer=home
Posted by guest , Jul 03, 2008 6:27PM
Goldman is so f'ing smart, that they probably unloaded some of their crap to these "bottom fishing" funds - they rock - which is why you should have all your money in GS equity.
Posted by guest , Jul 03, 2008 6:29PM
GS the Real Story..coming..MBAs watch out
Posted by guest , Jul 03, 2008 6:31PM
SELL GS.. quick
Posted by guest , Jul 03, 2008 6:57PM
guest @ 5:14 pm, nice use of irony, and thanks for the link.
Posted by guest , Jul 16, 2008 10:10AM
Opinions are more fun than facts, but the GS Liquidity Fund was not down "high double digits" in June. If age went backward (into negative numbers), the June return would not yet be a teenager.
Posted by guest , Aug 14, 2008 4:40PM
Like Goldman said, Mexicans are greaseballs...
Posted by guest , Aug 14, 2008 6:01PM
re the s-assed loser GS comment. Excuse my French, but the lovely phrase "mal baise" comes to mind re people like you.
Posted by guest , Aug 14, 2008 6:24PM
No one who actually is a baller uses the phrase "baller." Don't be that guy.
Posted by guest , Aug 17, 2008 10:23AM
Agree totally that the GS thing re teenagers is inappropriate
Posted by guest , Oct 16, 2008 1:49PM
Yes. SC said Garafoli from KBC said B Syrmen from Tellurian Capital had been thumbs down at Barclays . Given 2!.. years of no results now, would have long ago led any sensible investor to run for the hills, unless the FoFs are ripping off their own investors. Ask ADI or their new owner..or several others...??? Or maybe just blame the stupid, lazy motherfucking investment advisors rather than the moronic "traders"! Yours!
Posted by guest , Oct 16, 2008 1:54PM
Yes. SC said Garafoli from KBC said B Syrmen from Tellurian Capital had been thumbs down at Barclays . Given 2!.. years of no results now, would have long ago led any sensible investor to run for the hills, unless the FoFs are ripping off their own investors. Ask ADI or their new owner..or several others...??? Or maybe just blame the stupid, lazy motherfucking investment advisors rather than the moronic "traders"! Yours!
Posted by guest , Jun 10, 2009 9:54AM
Uh... "down high double digits"... is that like -99%.
Its seems that it was -11% which is low double digits.