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.
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.)
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