April 16, 2010
And you thought that Morgan Stanley Real Estate Funds were the only players in town who had an expertise in losing massive amounts of money. The Financial Times is reporting that Whitehall Street International, GS’s international REF has essentially been wiped out.
The fund is down to its last $30m, from about $1.8bn, a loss of about 98 cents on the dollar, according to the annual report sent to investors last month.
Goldman was the largest single investor in Whitehall, with a commitment of $436m, according to the annual report. The fund, raised in 2005, invested more than half its capital in the US, with the second largest exposure in Germany.
Luckily for investors, the fund acknowledged the “negative impact of leveraged investing in a market in which estimated asset values have declined materially”.
Blaming the market is the easy thing to do. Real courage is announcing forced retirements and naming names.
Still, what gets me more than all this is that so many investors, sovereign wealth funds, and so on continue to insist upon established sponsorship a la Tishman, Morgan, GS, etc.
They’ve all made home-run investments at one point or another in their lifetimes, but some of the later vintage vehicles should really raise some serious questions with any investor. Sure the market was going ape and these guys had to jump in, but isn’t the whole premise of investing for so many now to go after the deals these guys so expertly misjudged?
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- Management Fees Down; Hurdle Rates Up
- Who Are The Largest Firms Investing Internationally For US Clients? Here’s The Top 10