Outgoing Whitehall Head Warned of Goldman's Over-Exposure

Goldman had increased its equity stakes in the Whitehall fund family it manages and had invested more of its own balance sheet in commercial property when markets were booming, Rothenberg told the Real Estate Board of New York on Nov. 6 .

"The firm was, for all intents and purposes, almost an enlarged hedge fund for the past couple of years, where the more (investing) we could do on balance sheet and the less we could do in the funds, the more we did," he said.

...Rothenberg, 45, told his audience that beyond Whitehall, Goldman had been increasing its direct exposure to real estate through principal investments, which means putting its own balance sheet at risk.

..."The firm used to be 15 percent of the capital in each fund, then 20 percent of the capital in each fund, and then over the past few years it had been about 35 percent of the capital in each fund," Rothenberg said.