Wed, Jun. 1, 12:40 PM
- Goldman Sachs (GS +0.2%) eliminated dozens of managing directors, executive directors, and VPs across its mergers and debt and equity capital markets teams in the past few weeks, reports Bloomberg.
- These cuts are in addition to the bank's annual cull of 5% of its employees thought to be underperformers. They're also in addition to cuts in the trading operation after Q1 profit in that division fell 60% from a year ago.
- The M&A cuts are of interest as they come following a booming 2015, but with global activity off more than 80% this year. Earlier this week, President Gary Cohn said the same factors fueling mergers in 2015 are at work this year.
Tue, May 31, 3:26 PM
- A low-growth environment with financing both cheap and plentiful makes for conditions which should continue to be conducive to robust M&A activity, says Goldman Sachs (NYSE:GS) President Gary Cohn, speaking at a conference.
- Just $300B of deals were announced in Q1, the slowest pace since Q1 of 2014. This came, however, alongside a big swoon in markets in the year's first six weeks.
- As for the swooning trading business (revenue fell 37% Y/Y in Q1), Cohn is optimistic, particularly as competitors pull back faster than Goldman is doing.
Tue, May 31, 12:28 PM
- Usually tech companies in IPO registration don't go looking for financing, but with the IPO market at a near-standstill, Goldman Sachs (NYSE:GS) - already an equity investor and lead advisor to software company Nutanix - is now a debt holder after lending it $75M on favorable (for Goldman) terms.
- The senior notes guarantee the bank will earn at least a 9% return. Nutanix has said it will repay the loan when it does go public. The sooner the IPO, the better the annualized return. If for whatever reason, Nutanix doesn't go public, the three-year paper carries a 10% annual interest rate.
- Nutanix was valued at $2B in 2014.
Wed, May 25, 9:41 AM
- Absent last last year from a group asked to pitch Malaysia's largest sovereign wealth fund on a $750M bond sale was Goldman Sachs (NYSE:GS).
- At issue is the bank's involvement with another government entity, 1Malaysia Development Bank, and its now ex-star banker Tim Leissner, who drew in a number of Malaysian clients and helped oversee three bond offerings for 1MDB in 2012 and 2013.
- Leissner has't been accused of wrongdoing, but 1MDB has, and Goldman has retained an outside law firm to conduct an internal probe of its role with the fund.
- Goldman keeps its chin up: "Malaysian deal activity has been generally quiet but our dialogue with clients is positive and we are seeing a growing pipeline of transactions," says a spokesman.
Tue, May 24, 2:58 PM
- Goldman Sach's (GS +1.4%) asset management unit - looking to expand access to alternative strategies for its wealthy clients - is raising money to take stakes in mid-sized and larger private-equity firms, reports Bloomberg.
- Initial purchases will be made through the bank's Petershill II fund, which raised about $1.5B, and has mostly taken stakes in companies managing hedge funds.
- For Goldman, stakes in P-E funds bring a steady stream of management fees. For the target P-E funds, Goldman can help them lure big-fish institutional clients.
Fri, May 20, 2:29 PM
- "We see the same things they must be seeing," Goldman Sachs (NYSE:GS) CEO Lloyd Blankfein tells investors at the annual meeting. He's referring to the Fed, which turned from somewhat cautious on the economy to far more bullish in the past couple of weeks.
- Of note, Goldman returned to Jersey City after a few years of taking its annual meeting on the road to California, Utah, and Texas as it looked to showcase growth and operations in areas outside of New York.
Wed, May 18, 11:12 AM
- Sweeping new compensation rules released by six federal agencies last month would free up pay restrictions for the BlackRock's (NYSE:BLK) of the world, while tightening them for banks like JPMorgan (NYSE:JPM), Wells Fargo (NYSE:WFC), Bank of America (NYSE:BAC), Morgan Stanley (NYSE:MS), and Goldman Sachs (NYSE:GS).
- Source: Bloomberg
- The result is likely an even stronger flow of talent exodus from the big banks and to outfits like BlackRock, Vanguard, Pimco, and Fidelity, to name four.
- “They keep making it more difficult to be a big bank,” says a D.C. attorney.
- At those lenders with more than $250B in assets, top management would have 60% of their bonuses deferred for four years. Tough, but even tougher are clawback provisions allowing banks to take back money up to seven years after bonuses vest.
- Though mammoth in size, the overwhelming majority of assets at BlackRock and the like are client, not proprietary assets. Thus, they aren't subject to the same restrictions. Franklin Resources (NYSE:BEN), for instance, has $743B in AUM, but only about $16B of its own assets. Blackstone (NYSE:BX) manages $344B, but only $22B of its own money.
Wed, May 18, 8:00 AM
- Goldman Sachs Asset Management (NYSE:GS) is conducting a strategic review of its Australian equities and fixed-income businesses, reports Reuters, though it has not yet made a final decision on a sale.
- The operation oversees just A$9B, making it a pretty small player in absolute terms, and in Oz's $2.6T wealth management industry.
- Goldman last year sold its Indian fund management unit for $37.5M, but while the bank unloaded everything in India, it may keep its institutional business in Australia.
Sun, May 15, 8:23 AM
- Goldman Sachs (NYSE:GS) has quietly overtaken Chevron and ExxonMobil to become one of the biggest natural gas merchants in North America, expanding in physical commodities trading even as other banks pull back, FT reports.
- The Wall Street institution last year bought and sold 1.2T cubic feet of physical gas in the U.S. - equal to a quarter of the country's residential consumption and more than twice its volumes in 2013.
- According to Natural Gas Intelligence, Goldman is now the seventh-largest gas marketer in North America.
Thu, May 12, 12:33 PM
- Value-at-risk at JPMorgan (NYSE:JPM) jumped 50% amid Q1's volatility, reports Bloomberg. It's a figure standing in sharp contrast to declines of 25% or more at Bank of America (NYSE:BAC), Citigroup (NYSE:C), and Deutshce Bank (NYSE:DB), and smaller falls at UBS, Goldman Sachs (NYSE:GS), and Morgan Stanley (NYSE:MS).
- For Bank of America, it says the risk in its trading portfolio in Q1 was the lowest in any quarter since the Merrill Lynch merger in 2009.
- While cutting VaR reduces risk, it also limits profits, and in past times. notes a former Fed bank examiner turned college teacher, banks used episodes of higher volatility to step in and make money. In a Dodd-Frank world, making money in this fashion may not be received well by regulators.
Thu, May 12, 8:35 AM
- In what could only be described as certain to happen once the Panama Papers leak hit, the New York Department of Financial Services has asked Goldman Sachs (NYSE:GS), along with BNP Paribas (OTCQX:BNPQY), CIBC (NYSE:CM), and Standard Chartered (OTCPK:SCBFF) about their possible involvement with shell companies, according to CNBC.
- The NYDFS also requested information from 13 other lenders over the matter last month.
Fri, May 6, 8:11 AM
- The trading business likely isn't improving much in Q2 as Goldman Sachs (NYSE:GS) has let go about 100 people this week in its latest round of cuts, according to the WSJ.
- While it's not unusual for the bank to shed workers, the cuts have ben deeper than usual this year in a number of divisions, particularly fixed-income trading. This latest round means Goldman has let go about 10% of its fixed-income staff in 2016.
- “They have adjusted to the environment," says Evercore ISI's Glenn Schorr.
Mon, May 2, 3:07 PM
- This sort of idea tends to pop up about once a year, but - with Goldman Sachs (NYSE:GS) in the market for consumer savings deposits and looking to lend to the somewhat well-to-do, not just the super-rich - it may carry a little more currency this time around.
- CLSA's Mike Mayo says a Goldman purchase of E*Trade (ETFC +1.9%) would give the bank access to increased deposits and free up currently trapped excess capital. He currently has a Buy rating on GS.
Mon, May 2, 1:02 PM
- A far cry from the serious types of money Goldman (NYSE:GS) usually deals with, a new strategy taking shape calls for the bank to partner with small brokerages and wealth management firms to lend money to their clients.
- It's about Goldman being able to reach a far larger set of potential borrowers without having to acquire them through a merger or through a slow organic process, reports Reuters, noting the plan is still in early stages and may not be active until 2017.
- The typical client in Goldman's U.S. private wealth unit has an average account size of $50M, but this new strategy will include those with less than $1M in investable assets.
- With once-formidable business like trading mired in a secular slump, Goldman - which produced just a 6.4% ROE in Q1 - is looking for growth elsewhere. The new strategy will have Goldman maybe looking more like rival Morgan Stanley, which also has focused more on lending in recent years. Morgan, however, lends to its own clients, while Goldman would be lending through third parties.
Fri, Apr. 29, 12:11 PM
- Alongside the rest of the industry, Goldman Sachs (GS -0.7%) is struggling mightily with is looking more like a secular decline in fixed income, currency, and commodity trading - with revenue in that unit down 47% Y/Y in Q1.
- The bank's co-head of global FICC sales, Dalinc Ariburnu joined in 2009 and ascended to his current role in 2013. He's retiring, reports Reuters, and will be replaced by Jim Esposito, who will also continue with his current role as chief strategy officer for the securities division.
- Tom Cornacchia will continue as co-head of global FICC sales.
Mon, Apr. 25, 11:35 AM
- While the industry Goldman Sachs (NYSE:GS) serves has been dramatically restructured over the past decade, says Dick Bove in a report titled "The Lost Decade," the company was not.
- While the CEO and COO at Goldman have earned more than $500M since the end of 2006, the company stock price has underperformed the S&P 500's already meek 47% advance by a full 67 percentage points. Goldman's performance in relation to the other large banks is more middle-of-the-road.
- He takes management to task for continuing to put too much capital to work in businesses in secular decline like trading and investment banking.
- Now read: How To Milk The Mispricing Of Goldman Sachs (April 25)
The Goldman Sachs Group, Inc. is global investment banking, securities and investment management firm that provides a wide range of financial services to a substantial and diversified client base that includes corporations, financial institutions, governments and high-net-worth individuals. The... More
Industry: Diversified Investments
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