Goldman Sachs Real Estate Fund Vaporizes 98% Of Client Capital

Building Collapse

A Goldman Sachs real-estate fund, Whitehall International, has incinerated almost all of the $1.8 billion invested in it.

Remarkably, it’s not just Goldman clients who have gotten hosed: Goldman itself invested $436 million in the fund, 98% of which is now gone.

The culprit?

Highly leveraged bets on international real estate.

(The good news for Goldman is that the fund was launched in 2005, which means the firm probably collected 5 years of asset-management fees on the capital.  Assuming a standard 1%-2% fee on invested client capital (call it 1.5%), that’s ~$100 million of fees over the life of the fund.  So that mitigates the loss somewhat.)

Henny Sender has more in the FT…

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