Goldman Sachs' hedge performance has generated some unusual headlines as of late. Now comes news from Financial News Online that inflows to the gilded firm's alternative investment funds amounted to zero in the second quarter. Alternative investment, of course, has been a super success. In 2006, Goldman reported inflows of $32 billion. That came after a terrific performance year. Is this reason to worry? Well, as for the flagship Global Alpha fund, Goldman's CFO David Viniar said that redemptions have been slight. The word is that the fund was down at least 6 percent through May. Last year was a down year--almost 10 percent. Of course, the fund gained 50 percent in 2005. The firm seems to be planning new products that they hope will generate inflows.
Our take on the news: Continue those redemptions and get out of Goldman's fund and every other one you're in!
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