A new Goldman Sachs Group stock hedge fund could be launched with ore than $6 billion, with some investors expecting the fund to attract as much $10 billion, people familiar with the fund said.

Goldman has been raising money and preparing to launch its latest fund for the past few months. Goldman Chief Executive Lloyd Blankfein told investors last month the new long-short fund would focus on equities and help diversify the firm's fund offerings for clients.

The fund also will help Goldman retain successful traders who might otherwise be tempted to strike out on their own or join a rival firm.

A spokeswoman for Goldman declined to comment.

Goldman Sachs Investment Partners, the new fund, is set to open for business on January 1. It will be managed by two men who traded for Goldman's own accounts: Raanan Agus, head of principal strategies since 2003, and Kenneth Eberts, head of U.S. investments over the same period.

It has been an unusually tough year for Goldman Sachs Asset Management (GSAM), where market turmoil slammed Goldman's Global Alpha fund, which started 2007 with more than $10 billion in assets and could end the year at less than $6 billion after market declines and withdrawals.

A computer driven stock fund, Global Equity Opportunities, plunged by almost 25 percent in August. Goldman and some outside investors pumped $3 billion of new capital into the fund.

These setbacks have hurt Goldman by eating into fees.

As you know, we've had issues with the performance of certain of our quantitative funds, as have others in this space, Blankfein said at the investor conference.

While direct quantitative hedge funds represent only 5 percent of our assets under management, we realized it would be prudent to further expand our product portfolio in actively managed strategies, he said.

Goldman has opened Liberty Harbor, a $2.7 billion credit hedge fund, and GS Liquidity Partners, a $1.8 billion distressed debt fund.

GSAM has about $800 billion assets under management, up from $50 billion when the asset management business was launched 12 years ago. It has grown to become one of the biggest hedge fund managers in the world.

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