Goldman, Carlyle reported to have snapped up failing hedge fund's staffers. Amaranth Advisors traders and portfolios managers are finding new homes in the wake of the firm's demise. Goldman Sachs is said to have hired 17 Amaranth traders for its New York and Singapore offices. The Carlyle Group has reportedly hired a former Amaranth structured-product portfolio manager and two others for its Blue Wave hedge-fund unit.

Greenwich, Conn.-based Amaranth, a hedge fund manager, hit the skids in September when bad energy bets wiped out around $6 billion of its $9.5 billion in assets. A much bigger fuss was made of the collapse of Long-Term Capital Management, which lost about $4.6 billion over four months in 1998.

Sure, why not?

The rumored Goldman hires are supposed to support the New York-based investment bank's initiative to dedicate more capital to alternative strategies after its $10 billion Global Alpha Fund fell 11.6% through November and as returns worsen across the hedge-fund industry generally.

"It speaks to the investment banks' having decided to make a long-term commitment to hedge funds,"' Les Satlow, a portfolio manager at Salem, Mass.-based Cabot Money Management, told Bloomberg last week. "If they think they're able to get the talent at the right price, then why not do that?"

Led by Gregg Felton, formerly Amaranth's debt-market specialist, the new Goldman team is said to consist of 14 credit specialists based in New York and three based in Singapore.

Hedge-fund assets rose 11.7% this year to date through November. The S&P 500 saw a 14.2% gain through the same period.

Goldman administers $29.5 billion in hedge-fund assets. Alternative assets as a whole account for $139 billion of the $649 billion overseen by Goldman's asset-management division.

New wave

Goldman competitors like Morgan Stanley, JPMorgan Chase, and Citigroup have been hiring traders and generally ramping up on the hedge-fund side as well.

Another report has the Washington, D.C.-based Carlyle Group hiring former Amaranth structured-product portfolio manager Scott Davidson to manage a similar strategy for Carlyle's nascent Blue Wave hedge-fund unit, which is expected to launch its first fund in 2007.

Politically-connected Carlyle is also reported to have hired former Amaranth energy-stock manager John Bailey along with Jaime Gualy to manage Blue Wave's equity long-short energy strategy.

The ex-Amaranth managers will report to Rick Goldsmith and Ralph Reynolds, who joined Carlyle this past summer from Deutsche Asset Management to help found Blue Wave. -FWR

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