U.S banking major, The Goldman Sachs Group, Inc.’s (GS) multi-disciplinary hedge fund unit – Goldman Sachs Investment Partners – has launched a new hedge fund in Asia named Oryza Capital. Goldman Sachs is at present raising capital for the fund. Through this new fund, the bank primarily seeks to tap rising opportunities in the emerging markets of Asia.
Oryza Capital came into being earlier this month, and is a long/short equity fund, which invests in Asia – including Japan – as well as Australia. The fund is managed by Goldman Sachs Investment Partners' Asia co-heads, Hideki Kinuhata and Ryan Thall.
Asia’s economic growth has outperformed both the U.S. and Europe in the recent past. Further, according to Chicago-based data provider Hedge Fund Research Inc., inflows into Asia-based funds have taken regional hedge-fund assets to the highest level since 2007. These factors played a significant role in attracting global investors like Goldman Sachs.
Goldman Sachs Investment Partners was set up in 2008, within the banking major’s Asset Management division, mainly to comply with the Volcker’s rule. The unit manages roughly $1 billion of regional holdings, and has generated a return of almost four times its initial investment of $7 billion.
Due to a sluggish macroeconomic environment in the U.S., coupled with stringent regulations, banking majors such as Citigroup Inc. (C), JPMorgan Chase & Co. (JPM) and Bank of America Corporation (BAC) have experienced limited and uncertain top-line growth. These banks are increasingly seeking other avenues to counter the challenges. In this context, the formation of Oryza Capital highlights Goldman Sach’s initiatives to turn previous proprietary trading entities into revenue-generating units.
Goldman Sachs currently carries a Zacks Rank #2 (Buy).
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