Goldman Sachs has offered loans to more than 1,000 employees, who have invested in the company’s own products, and may struggle to meet demands for more capital.
The firm allows employees to invest in its own investment funds, and some have committed millions of dollars. A number of these funds periodically require investors to add more money as part of the way they are structured.These payments will be due in April, and Goldman Sachs realised some employees may struggle to meet these requirements, after they received smaller bonuses than usual in 2008.
†The loans, which were offered by email last week, could be as much as hundreds of thousands of dollars, and must be paid into the funds. They cannot be used for other personal needs.
A spokesman explained: “These loans are fully collateralised against other assets, although the collateral may be funds employees already have in Goldman Sachs’ products. These loans are offered at commercially-available rates, but the difference is that employees would find it difficult to go to another bank and get a loan collateralised against funds held in the investment products of another bank.”
None of the loans have yet been made.