Detractors say that Goldman Sachs, the financial giant famous for its powerful investment bank, has turned into "the world's biggest hedge fund". Yesterday, it appeared that they might be absolutely right.
Goldman does indeed have the largest hedge fund on the planet, according to a comprehensive new survey. It manages $21bn (£11.4bn) of assets, up 88 per cent on a year ago and leapfrogging it into the No 1 spot, from third place in 2005.
The survey, by Institutional Investor's Alpha magazine, shows how the top 100 institutions account for 65 per cent of the hedge fund industry, compared to 54 per cent two years ago.
The survey underscores the growing dominance of a handful of mega-managers, particularly those whose investment decisions are based on number-crunching by huge computers rather than individual analysis. Goldman's Global Alpha hedge fund is run by a team of 50 professional managers, a far cry from the first wave of hedge funds run by a star manager. It is the first time since 1998 - when George Soros's Soros Fund and Julian Robertson's Tiger Management were dominant - that the size of the biggest fund has swelled beyond $20bn.
Those who call Goldman the world's biggest hedge fund are actually referring to the trading and investments side of the group, which accounts for 67 per cent of net revenues and - say its detractors - is putting too much of the group's own money at risk by betting on movements in the financial markets. Its asset management business accounts for about 18 per cent of Goldman's net revenues.
Connecticut-based Bridgewater Associates was second to Goldman, managing $20.9bn.Reuse content