GoldenTree Asset Management is exiting the long only separate account business and is returning $1.2 billion to investors. "In the current environment for high yield we believe we can offer the best value to our clients by being total return managers," said Steven Tananbaum, President and Chief Investment Officer of GoldenTree, in a statement. The move underscores the conflict between absolute return and benchmark driven asset management, according to the GoldenTree release.
"In a market of low volatility and too much capital we must be able to use all of the tools available to us in order to produce returns. Not being able to short or leverage; being limited to how much cash an account may hold and being measured against an index, severely limits our ability to perform for our clients. Rather than continue with these constraints we have chosen to exit the separate account long only business," Tananbaum continued.
GoldenTree has made a strategic decision to identify new areas to deploy its assets. The firm has launched GoldenTree InSite Real Estate Partners, which will be looking to invest in real estate transactions through both direct and indirect equity investments, including illiquid real estate partnerships. GoldenTree InSite will partner with small to mid-size entrepreneurial real estate operators where it believes there is a current gap in the capital markets. Also Todd Eagle has joined GoldenTree as a portfolio manager and director of real estate fixed income. Eagle most recently ran Goldman Sachs Real Estate Transitional Loan Program.