Goldman's Global Alpha Hedge Fund Falls Further In 2007

Bloomberg:

Goldman Sachs Group Inc.'s Global Alpha hedge fund fell 3.4 percent in the first four months of this year hurt by losses in the currency markets, according to a report sent to investors last week.

The decline compares with the average hedge-fund advance of 4.9 percent, data compiled by Chicago-based Hedge Fund Research Inc. show. Global Alpha dropped 12 percent since 2005, when it rose 40 percent and attracted more than $3 billion of new cash.

The $10 billion fund, managed by Mark Carhart and Raymond Iwanowski, struggled in a 16-month stretch when the Standard & Poor's 500 Index climbed 22 percent. Global Alpha's decline has cut into fees that reached $700 million after the gains of 2005 and has made New York-based Goldman, the biggest U.S. securities firm by market value, vulnerable to client withdrawals.

``Typically, an investor will accept one down year,'' said Gregory Dowling, vice president for alternative investments at Cincinnati-based Fund Evaluation Group LLC. His firm isn't an investor in the Goldman fund. ``After two years, investors may get concerned about the stability of the investment team and client base.''

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