'Goldfinger' makes comeback with launch of $5bn hedge fund

Mark McGoldrick, a former Goldman Sachs trader whose track record earned him the nickname 'Goldfinger' during his career with the Wall Street bank, is making a comeback with a new $5bn (£2.8bn) fund.

McGoldrick, who famously earned $70m a year ($200,000 a day), but resigned because it was not enough, has asked his old firm to raise money for a super hedge fund that will concentrate on special situations.

While at Goldman Sachs, McGoldrick was head of distressed and special situations investing in Asia. He co-founded and built the firm's secretive 'special-situations group', Goldman's elite and opaque money-making machine, which buys and sells eclectic assets including British power plants, Japanese golf courses and Thai auto loans.

The unit was said to differ from Goldman Sachs's normal proprietary trading and other hedge funds because it specialised in investing in largely illiquid, often distressed assets such as real estate or corporate debt which often would not pay out for several years.

Despite these risks, McGoldrick managed to make millions and is said to have earned a large chunk of the bank's profits in 2006.

He quit shortly afterwards and hit the headlines when it emerged he felt he had not been paid enough. Colleagues told reporters that McGoldrick had complained furiously that he was not paid on the same basis as counterparts at independent hedge funds. At the time a few top traders at private equity firms and hedge funds were earning $100m a year. At the time, McGoldrick privately promised a comeback. Observers said it was "typical" of him to launch his new business when most other hedge funds and traders are suffering. It is understood that he will use the $5bn to snap up companies and assets around the world that have plummeted in value due to the turmoil in the financial markets. A raft of stellar funds and traders have in recent months imploded by attempting to be contrarian. Last week New York-based Ospraie Management said it is closing its flagship Ospraie fund after substantial losses. The commodities focused money manager said the fund has lost nearly 39 per cent of its value this year, or almost $1.3bn, with more than half of that in August alone. RAB Capital, the London-listed hedge fund group, has suffered as its flagship Special Situations fund, once one of the best performing funds in the world, has posted big losses this year. Last week Philip Richards, who runs the fund, stepped down as chief executive of RAB Capital to concentrate on turning Special Situations around. Many hedge funds have suffered the worst returns for a decade. Prime brokers in most of the major investment banks are reporting record losses with July the worst month in terms of hedge fund performance across all strategies for eight years. Morgan Stanley prime brokers told clients that just 15 out of 350 hedge funds clients posted positive results at the end of last month. McGoldrick could not be reached and Goldman Sachs declined to comment.