Goldman Credit Team Change Raises Questions

Goldman Sachs quickly named new portfolio managers after Gregg Felton, managing director of fixed income, departed. He ran a credit fund as well as other investments.

The new investment officers, Brendan McGovern and Salvatore Lentini, are members of a group, Liberty Harbor, that came to Goldman in 2006 from Amaranth Advisors.

This was after Amaranth collapsed from bad commodity bets. Amaranth’s credit team retained its reputation and, led by Mr. Felton, continued to work together at Goldman.

They will now report to Raanan Agus, a Goldman veteran who’s headed the bank’s  prop trading desk—where a number of hedge fund managers gained experience before starting their own business, including Eton Park founder Eric Mindich and Och-Ziff founder Daniel Och.

One question is whether Mr. Agus will reshape investment strategies at Liberty Harbor. He has long been known as an aggressive trader but with Dodd-Frank regulations, Goldman can’t go for risky trading anymore.

The other question: Will the Liberty Harbor team of around 20 investment professionals hold together? According to HedgeFundAlert,  which reported his departure, Mr. Felton would like to work for an independent investment business. His old friends at Liberty Harbor might join him if he ends up at an attractive place. They’ve been together a long time.

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