Goldman Sachs Asset Management, the 8th largest manager of money market mutual funds with $142.5 billion, has announced that it will be consolidating its Institutional Liquid Assets (ILA) money fund family into its larger Financial Square series of money funds. ILA Money Market Portfolio, ILA Treasury Obligations Portfolio, ILA Treasury Instruments Portfolio, and ILA Federal Portfolio are expected to liquidate Friday, while ILA Tax Exempt Diversified Portfolio and ILA Prime Obligations Portfolio are scheduled to liquidate on Monday, August 30.
A March 1, 2010, filing announced the plan, saying, "The Board of Trustees of Goldman Sachs Trust has approved a plan to consolidate the assets of the Funds with those of other similarly managed money market funds of the Trust by allowing shareholders of the Funds the opportunity to acquire shares of substantially similar Goldman Sachs money market funds in exchange for their current ILA Fund holdings. This Consolidation may result in the movement of portfolio securities from ILA Funds to their prospective counterparts. Additional details of the Consolidation will be provided to Fund shareholders in the coming weeks."
It continued, "After the Consolidation has been fully carried out, each Fund's shareholders who have chosen to participate will hold shares of a substantially similar money market fund into which their Fund has been consolidated. The Funds will then be liquidated, and shareholders who have chosen not to participate in the Consolidation will receive a liquidating distribution in the amount of their investment. The Consolidation and subsequent liquidation described above will not include the Goldman Sachs Institutional Liquid Assets Tax-Exempt California Portfolio or the Goldman Sachs Institutional Liquid Assets Tax-Exempt New York Portfolio -- these portfolios will continue operations and are expected to be rebranded at a future date for inclusion in the Goldman Sachs Financial Square family of money market funds."
It added, "All steps of the Consolidation and subsequent liquidation of the Funds are expected to be completed sometime after June 1, 2010 and on a date no later than August 31, 2010. It is currently anticipated that, until the Consolidation is carried out, new and existing Fund shareholders will continue to be able to purchase Fund shares and/or reinvest their dividends in additional Fund shares. The rights of Fund shareholders to redeem some or all of their shares will remain unchanged."
A July 27 Prospectus supplement added, "As previously noted in the Prospectus Supplement dated March 1, 2010, the Board of Trustees of Goldman Sachs Trust has approved a plan to consolidate the assets of the Funds with those of other similarly managed money market funds of the Trust. ILA Fund shareholders have the opportunity to exchange their shares for shares of substantially similar Goldman Sachs money market funds at amortized cost (i.e., Fund shareholders receive $1.00 for each share currently held and pay $1.00 for each new share of the new Goldman Sachs money market funds). After this voluntary exchange has been fully carried out, each Fund will be liquidated, and shareholders who have chosen not to participate in the exchange will receive a liquidating distribution in the amount of their investment."
It continues, "All steps of the exchange and subsequent liquidations of the Funds are expected to be completed sometime prior to or including August 31, 2010, with such dates subject to the discretion of the officers of the Trust. The precise dates of the Funds' eventual liquidations within this period may vary. The Funds may be liquidated at different times, depending in large part on the percentage of each Fund's shares that are redeemed. If a relatively large percentage of a Fund's shares is redeemed, then continuing operations through August 2010 may not be feasible, and the Fund would be more likely to liquidate as of an earlier date."
Finally, it said, "In anticipation of the liquidation of portfolio holdings that will be necessary to satisfy exchange requests, and because it is expected that each Fund will be fully liquidated no later than August 31, 2010, a Fund may not be fully invested over the course of the next few weeks. Furthermore, to the extent that a Fund's assets are invested, they may be concentrated in relatively short-term, low-yielding securities. Therefore, during the period prior to liquidation, the Funds may not be achieving their investment objectives, and performance may be adversely affected. Finally, while each Fund will attempt to increase its liquidity in anticipation of the potential exchanges and eventual liquidation, significant redemption or market activity prior to liquidation could adversely affect a Fund’s liquidity and its ability to maintain a $1.00 net asset value per share."
For a full list of the funds and share classes involved, see our Money Fund Intelligence or Money Fund Intelligence XLS, or check our Resources, Fund Detail page. (The ILA funds are still listed in our August issue, but the mergers and changes will be reflected in our pending September issue.)
