Goldman Sachs Group Inc. may start its newest stock hedge fund with as much as $10 billion in what would be the biggest debut in the industry’s history, two people with knowledge of the fund said.

Goldman Sachs Investment Partners, set to open Jan. 1, is being run by traders who previously worked on the New York-based company’s proprietary equity desk. They are led by Raanan Agus, 40, who had been head of the bank’s principal strategies group since 2003, and Kenneth Eberts, 41, who had been in charge of U.S. investments since 2003.

The equity trading group, once overseen by former U.S. Treasury Secretary Robert Rubin, has spawned at least six multibillion-dollar hedge funds, including those managed by Richard Perry, Daniel Och and Eric Mindich. They all left Goldman to start their own firms. This time the traders are staying at Goldman, moving to its asset-management group.

“It’s a first for Goldman to offer an in-house fund” to keep talented people, said Jeff Tarrant, chief investment officer of New York-based Protege Partners LLC, which farms out money to hedge funds.

If Goldman starts the fund with $10 billion, it would surpass the record set last year by Michael McCaffery, former head of Stanford University’s endowment, who started his Menlo Park, California-based Makena Capital Management LLC with $7 billion. The firm typically raises money from wealthy investors and institutions such as pension funds and insurers. [MORE]