The amount of shares Lansdowne sold in Goldman Sachs (nearly five million) accounts for close to one percent of Sachs’ total share capital.  Lansdowne was one of the investment banker’s “top twenty investors” until the sale went ahead.  Indeed, the stake amounts to close to “10 percent of the $10bn funds Lansdowne has under management.”

2008 Sales

The last time that Lansdowne actually sold shares in Goldman Sachs was around three years ago, “in the months leading up to the collapse of Lehman Brothers in 2008, which precipitated the global banking crisis.”

There has been concern regarding the implementation by American regulators of the Volcker Rule, according to reports in The Sunday Telegraph. This new legislation will force banks to “spin off certain proprietary investment practices, which could hit Goldman’s profits.”  Just a week ago it became clear than over “a dozen traders had quit Goldman’s US government bonds and derivatives trading desk in New York in recent months, as the bank takes fewer risks, and big bonuses for ambitious traders dry up.”

More than 1,200 members of the hedge fund industry took part in the 13^th Annual Open Your Heart to the Children Benefit, which was co-chaired by Jay Peller of Citco Fund Services and Goldman Sach’s Dean Backer. At the event, Anthony Scaramucci of Skybridge Capital received the Hedge Funds Care Award for Caring.

Why Child Abuse?

In an interview with FINalternatives, Peller shared a bit about the community’s decision to focus their fundraising on the support of abused children. He said:

“Our founder, Rob Davis, began his first career as a teacher where he encountered children who were obviously abused and/or seriously neglected right in his classroom. And most importantly, child abuse, unlike other childhood issues such as juvenile diabetes, or pediatric oncology, does not have a constituency of parents advocating for those children. Child abuse and neglect is a hidden problem, happening usually behind the closed doors of the house or apartment. And it is not a topic that people want to discuss. For that reason it is often misunderstood. What better cause for the hedge fund industry to embrace?”

The startling figure was suggested yesterday by the chief US economist at Goldman Sachs, Jan Hatzius, who said that an estimated $400bn (£290bn) in losses on mortgages would be magnified as lenders reacted to stay within their solvency requirements.

“Even a $400bn loss does not look all that large compared to the vast size of the US financial markets, and one sometimes hears that it is just equivalent to one bad day in the stock market,” Mr Hatzius told clients. “But this analogy is wrong. There is a big difference between stock market losses, which are mostly borne by long-only investors, and mortgage credit losses, which are mostly borne by leveraged investors such as banks, broker-dealers, hedge funds, and government-sponsored enterprises.”