Fri, Apr 25, 2014
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Hedge fund Lansdowne dumps entire $850m stake in Goldman Sachs

Monday, August 01, 2011
Opalesque Industry Update – Europe’s biggest hedge fund, Lansdowne Partners, has confirmed its decision to sell its entire $850m stake in American investment bank Goldman Sachs. The move raises question about the prospect of the global banking sector, various media reports say.

According to a report by the British newspaper The Independent, Lansdowne owns nearly one percent of the Wall Street bank’s equity. Lansdowne’s exposure in Goldman Sachs is equivalent to nearly 10%of its entire $10bn assets under management.

Others see the sale of at least 4.94 million Goldman shares as a further blow to the Wall Street Bank which saw its shares plunge to levels not seen since 2009 after results of second-quarter performance showed disappointing numbers.

Goldman Sachs reported a $1.09bn profit in the second quarter and announced a decision to cut up to 1,000 jobs worldwide.

What is significant with Lansdowne’s move is that the firm made a similar offloading decision at the height of the financial crisis in 2008 when it sold its shares ahead of the collapse of Lehman Brothers. The hedge fund is one of the top 20 investors in Goldman.

While the hedge fund’s decision to exit Goldman is due to the decline in the value of Goldman’s proprietary trading operations, many analysts hint that it also raises serious questions about the health of the global banking industry.

Banks’ proprietary trading operations are hit by new regulatory changes under the Volcker rule. Many investment banks have already disbanded their proprietary units.
Precy Dumlao

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Banner
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing
  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Opalesque Exclusive: Rainwater and Blue Sky - an Australian water fund emerges[more]

    Bailey McCann, Opalesque New York: Financial reporters often tout new funds and investments as uncorrelated investments, but few can say they are uncorrelated to everything but weather. Enter Blue Sky Alternative's water fund which invests in the permanent rights to Australia's water. Sev

  2. Regulatory – Expect greater SEC scrutiny of hedge funds that share information or collaborate in advance of their trades, Alternative funds to get SEC test for leverage, liquidity[more]

    Expect greater SEC scrutiny of hedge funds that share information or collaborate in advance of their trades From Thelawyer.com: A recent Wall Street Journal article — ‘Activist investors often leak their plans to a favoured few’ — focused attention on ‘activist’ investors and stock analy

  3. …And Finally – This week's least competent criminal is Austrian[more]

    From ABCnews.go.com: A German sought by authorities for alleged fraud has been arrested in Austria — after dropping into a police station to ask officers whether he was under investigation. Police in Salzburg said the 59-year-old man walked into a police station in the city on Friday night. Sp

  4. Investing – Hedge funds find pitfalls along with profits in real estate ventures, Marcato Capital Management makes new bet on Dillard’s[more]

    Hedge funds find pitfalls along with profits in real estate ventures From Law360.com: Hedge funds have joined the rush to real estate deals and development in recent months to close the financing gap left by tightening bank standards, but attorneys say many aren't prepared for the disclo

  5. Agecroft Partners estimates 90% of hedge funds using social media[more]

    The use of social media has increased significantly within the hedge fund industry over the past couple of years. Social media is broadly used by investors as part of their due diligence process on hedge funds, by service providers in their sales efforts to hedge funds, and by hedge funds to enhance