Signaling a growing worry over the impact of regulation on investments banks' abilities to perform, Europe's biggest hedge fund reported that it had cashed out its $850mn stake in the Goldman Sachs Group.  London-based Lansdowne Partners, with $16 billion under management, sold the position at the beginning of the year.  Notwithstanding the move, Lansdowne's flagship UK fund still is down 11% so far in 2011.  

A source close to the situation told Reuters that the sale wasn't a reflection on Goldman Sachs, in particular, whose shares are down 20% in 2011.  Lansdowne simply was pursuing a strategy to move out of investment banks and into retail banks - the fund still holds a large position in Lloyds Bank.  

Goldman, however, has felt its share of investor scrutiny this year.  Investors continue to be worried that the bank won't be able to perform effectively with Dodd-Frank limiting proprietary trading and high levels of risk at investment banks.  Furthermore, last month Goldman reported earnings well below even analyst's lowered expectations, who say Goldman has been too conservative and avoided risk to its detriment.   [Reuters, 8/1/11]