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[tommyt]

Goldman's Global Alpha Hedge Fund Falls 3.4% in 2007 (Update1) By Jenny Strasburg May 30 (Bloomberg) -- Goldman Sachs Group Inc.'s largest hedge fund fell 3.4 percent in the first four months of this year, trailing peers because of losses on bonds and currencies, according to a report sent to investors last week. The decline in the Global Alpha fund compares with the average hedge-fund advance of 4.9 percent, data compiled by Chicago-based Hedge Fund Research Inc. show. The fund has 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.'' Goldman spokesman Peter Rose declined to comment about the fund's performance. Carhart and Iwanowski, both 41, must recoup the losses to collect incentive fees on the cash that followed the 2005 rally. Their management fees, which equal 1.5 percent to 2 percent of assets, have been reduced by the fund's decline. Norwegian Krone Hedge funds are private, largely unregulated pools of capital whose managers can buy or sell any assets and participate substantially in profits from money invested. Global Alpha, which started in 1995 with $10 million, advanced 0.4 percent last month on bets that global stocks and metals prices would increase, according to its latest investor letter. Hedge funds globally gained an average 2 percent in April, according to Hedge Fund Research. The Goldman fund's profits were trimmed by wagers that currencies, including the Canadian dollar and Norwegian krone, would decline. The Canadian dollar gained 4 percent against the U.S. dollar in April, and the krone gained more than 2 percent. Global Alpha's returns also were hurt by so-called market- neutral investments in fixed-income and equity markets, according to the latest monthly update. A market-neutral strategy attempts to generate consistent gains regardless of whether prices rise or fall. The U.S. equity market-neutral strategy ``detracted from performance as our earnings quality and valuation themes performed poorly,'' Global Alpha managers said in the letter. Return vs. Benchmark The fund makes high-risk bets often based on computer- driven models, which can lead to swings in performance. One of its objectives is a low level of correlation, or degree of shared fluctuation, with the S&P 500. Goldman has marketed Global Alpha as having a target annual return of 20 percent, according to two investors who declined to be named because the fund is private. Goldman uses the one-month U.S. dollar-based London interbank offered rate, or Libor, as a benchmark for Global Alpha, according to the investor update. In the 12 months ended March 31, the benchmark yielded 5.49 percent as Global Alpha declined 20 percent, according to the client report. Goldman's hedge-fund assets, which are part of Goldman Sachs Asset Management, rose 48 percent to $32.5 billion in 2006, making it the second-largest U.S. hedge-fund manager after New York-based JPMorgan Chase & Co., according to a survey by Absolute Return magazine. JPMorgan managed $34 billion at the end of December.

[Mtrader]

How can this be? GS==Direct line to GOD.

[da_cheif]

How can this be? GS==Direct line to GOD.

Hey zedor....you had an open line but you werent listening.......

http://www.traders-t...?...pic=800&hl=