Goldman’s hedge fund bonanza
AI hedge fund Situational Awareness became the biggest prime brokerage client at Goldman Sachs this year. That reveals the fund’s importance before it suffered tens of billions of dollars in losses.
Lending to Situation Awareness made Goldman more than $200mn in fees this year. This topped the amount it earned from any other client in its prime brokerage business financing hedge funds, according to people familiar with the matter, write Joshua Franklin, Jill R Shah and Arjun Neil Alim.
Having shot to fame following some highly profitable bets on AI, Leopold Aschenbrenner’s fund became one of the biggest overall clients of Goldman’s trading division this year, the people added.
It is virtually unheard of on Wall Street for a fund such as Situational Awareness, which is barely two years old, to so quickly become such a large client of an investment bank like Goldman, sitting alongside blue-chip hedge funds including Citadel and Millennium.
The fees for Goldman became so large because of the rapid growth of Aschenbrenner’s fund as well as the types of trades he was making.
Aschenbrenner, whose firm remains a client of Goldman, told his investors in July that he would no longer borrow money to magnify its bets. That would mean that future fees for Goldman would not be on the same scale as before the losses.
Goldman and Situational Awareness declined to comment.
Aschenbrenner, a 24-year-old former OpenAI researcher with no trading experience, founded Situational Awareness in 2024 with a few hundred million dollars in assets, racking up returns of more than 400 per cent and growing the fund to more than $20bn.