Amaranth losses hit GSDO, other funds of hedge funds (Margot Patrick)

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By Margot Patrick -- DOW JONES NEWSWIRE

Sept. 19, 2006 -- LONDON (MarketWatch) -- Losses at multi-billion hedge fund manager Amaranth Advisors LLC have hit at least one London-listed fund of hedge funds, according to regulatory filings.

Goldman Sachs Dynamic Opportunities Ltd. (GSDO.LN), the hedge fund vehicle listed on the London Stock Exchange in July by Goldman Sachs Group Inc. (GS), late Monday said it may post a 2.5-3 percent loss in September because of its holding in Amaranth, depending on the performance of its other holdings.

As of Sept. 1, Amaranth accounted for about 5 percent of GSDO's overall investments across 18 hedge funds.

In a letter to investors Monday, Amaranth said it anticipated that year-to-date losses could be more than 35 percent after a fall in natural gas futures last week. As one of the biggest U.S. hedge funds, with $9.2 billion in assets at the end of August, Amaranth has been a key holding for a number of funds of hedge funds.

Recent U.S. regulatory filings show holdings in Amaranth by funds of hedge funds run by Morgan Stanley (MS) and Credit Suisse (CSR), among others.