Investment management is a tough business. Just ask Goldman Sachs. Albourne Village alerted me to two articles about the troubles at Goldman Sachs Asset Management (GSAM). There has been turnover of key personnel at the top. In eight years, there have been eight different heads of GSAM.
Both traditional and alternative funds have struggled. Hedge fund assets under management (AUM) have declined from $29.5 billion in 2006 to $19.5 billion in September 2010. Equity and bond mutual funds have trailed the average performance over the three, five and ten year benchmarks according to Morningstar. The total decline in AUM is $71 billion in 2010 including the Nevada Public ($600 million) and the Kern County Employees' Retirement Systems ($347 million).
Goldman Sachs may be seen as having reputational risk from its high profile in the news from the Facebook deal, the SEC civil suit for its involvement in Abacus and its collateral calls on credit default swaps with AIG.
You may access the articles here and here.
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