Pittsburgh Post-Gazette – In early 1997, Mark Carhart was an academic at the University of Southern California. His big claim to fame was his doctorate work at the University of Chicago onmutual-fund performance.
Today, the 40-year-old Mr. Carhart and another former Chicago-school colleague run a big, secretive hedge fund at Goldman Sachs Group Inc. which, with an estimated $10 billion in assets, is the Cadillac of a fleet of alternative investments that have boosted the earnings at the blue-chip Wall Street firm. And the two men are making millions themselves.
Known as Global Alpha, the Goldman hedge fund was a leading contributor to a surge in “incentive fees,” or performance-related fees, that Goldman reported for the first quarter ended in February. In that period, the incentive fees soared to $739 million from $131 million a year earlier, helping Goldman’s earnings rise 64 percent to $2.48 billion, the biggest first-quarter gain of any major Wall Street firm.
Global Alpha’s recent returns have been sizzling. In the 12-month period ended in March, the fund returned more than 48 percent before some fees, according to Goldman Sachs JBWere, an Australian affiliate of Goldman. It was closed to new investors last year. (On Wall Street, the word alpha refers to investment returns beyond those generated by the market.)
