Goldman Sachs wants to make it easier for some of the mutual funds it works for to get a piece of the Goldman Sachs initial public offering expected next month.
Goldman Sachs and its asset management subsidiaries serve as sub-advisers for five mutual funds in which there are at least one other sub-adviser. Federal securities laws which prohibit conflicts of interest bar Goldman Sachs' fellow sub-advisers in those funds from buying shares of the Goldman Sachs' IPO.
For that reason, Goldman Sachs has asked the SEC to exempt other sub-advisers from the securities laws prohibitions. In an application filed with the SEC April 6, Goldman Sachs said that the other sub-advisers in the five funds are unrelated to the firm and do not consult with Goldman Sachs on how they invest their share of fund assets.
The funds which Goldman Sachs identified in the SEC filing include: Managers Special Equity, EAI Select Managers Equity Fund; Diversified Investors Special Equity, Hirtle Callaghan Growth Equity and Seasons Series Trust.
As it stands now, the securities laws, "may cause (other sub-advisers) to forego investment opportunities that would be in the best interest of the Funds' shareholders," Goldman Sachs said in its SEC filing.
A Goldman Sachs spokesperson declined to comment, citing federal securities laws which restrict the comments of company officials while the IPO registration statement is pending. Goldman Sachs said in a statement April 12 it expects to complete its IPO by next month. The firm said in March that it plans to sell a nearly 13 percent stake to the public.
Institutional investors and analysts expect the Goldman Sachs IPO to be in great demand. Funds which get an allotment of the IPO can expect a quick return on their investments should they decide to immediately sell the Goldman Sachs shares. Institutional investors such as mutual funds compete for hot IPO shares because they provide a short-term return with little investment risk.