Goldman Sachs Group Inc. waived fees to draw investors to its Global Equity Opportunities hedge fund after stock-market losses wiped out $1.4 billion of assets this month, Bloomberg reports.
New participants won’t pay the 2 percent management charge and Goldman will cut its performance fee in half.
Goldman, the world’s most profitable securities firm and second-largest hedge fund manager, needed capital after stock declines worldwide confounded Global Equity’s computer-driven bets and threatened to spur withdrawals. The so-called quantitative fund lost 28 percent of its value this month. Other quant funds, including AQR Capital Management LLC and Highbridge Capital Management LLC, also suffered declines.
“In order to lure outside investors, they had to sweeten the deal,” says Ross Intelisano, a lawyer in New York at Rich & Intelisano LLP, which advises hedge fund clients.