Fri, Mar 29, 2024
A A A
Welcome Guest
Free Trial RSS pod
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   |   
Previous Opalesque Exclusives                                  
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. KKR raises $6.4bn for the largest pan-Asia infrastructure fund[more]

    Laxman Pai, Opalesque Asia: The New York-based global investment firm KKR has raised a record $6.4bn for its second Asia-focused infrastructure fund, underlining investors' continued appetite for private markets. According to a media release from the alternative assets manager, the figure top

  2. Bucking the trend, top hedge fund makes plans for a second SPAC[more]

    From Institutional Investor: SPACs aren't dead. At least not to the folks at Cormorant Asset Management. The life sciences firm, whose hedge fund topped its peers in 2023, is confident it will match the success of its first blank-check company. Last week, the life sciences and biopharma speciali

  3. Benefit Street Partners closes fifth fund on $4.7 billion[more]

    Bailey McCann, Opalesque New York: Benefit Street Partners has closed its fifth flagship direct lending vehicle, BSP Debt Fund V, with $4.7 billion of investable capital across the strategy. Benefit Street invests primarily in privately originated, floating rate, senior secured loans. The fun

  4. 4 hedge fund themes that are working in 2024[more]

    From The Street: A poor earnings report from Tesla (TSLA) has not hurt the indexes on Thursday. The decline in Tesla stock, which is losing its position in the Magnificent Seven pantheon, is more than offset by strong earnings from IBM (IBM) and ServiceNow (NOW) . In addition, the much higher-t

  5. Opalesque Exclusive: A global macro fund eyes opportunities in bonds[more]

    Bailey McCann, Opalesque New York for New Managers: Munich-based ThirdYear Capital rebounded in 2023, following a tough year for global macro. The firm's flagship ART Global Macro strategy finished the year up 1