Goldman Sachs is preparing to offer a new long-short hedge fund, Goldman Sachs Investment Partners, on Jan. 1 that could raise between $6 billion and $10 billion, Reuters reports.

Two managers who have traded for Goldman’s own accounts, Principal Strategies Director Raanan Agus and Director of U.S. Investments Kenneth Eberts, will run the fund. They will be joined by other Goldman stars who, observers said, could be convinced to remain with the firm at a time when the performance of many of its funds have suffered.

The funds will debut at a time when Goldman Sachs Asset Management has had a rough 2007. The Goldman Global Alpha Fund, which had $10 billion in assets at the beginning of the year, could be depleted by as much as $4 billion in redemptions and losses, ending 2007 with only $6 billion.

The quantitative Goldman Global Equity Opportunities fund plummeted 25% in August alone, prompting Goldman and some outside investors to try to prop it up with an infusion of $3 billion.

“As you know, we’ve had issues with performance of certain of our quantitative funds, as have others in this space,” said Goldman CEO Lloyd Blankfein. Because “direct quantitative hedge funds represent only 5% of our assets under management, we realized it would be prudent to further expand our product portfolio in actively managed strategies.”

Recently, Goldman debuted the $2.7 Liberty Harbor credit hedge funds and the $1.8 billion GS Liquidity Partners distressed debt fund. With $800 billion of assets under management in hedge funds, GSAM is one of the largest hedge fund managers in the world.

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.