Goldman Sachs retreats from mass market in long quest for higher valuation
As David Solomon set out to sell his latest overhaul of Goldman Sachs to investors on Tuesday, there was little sign of the sharp-tongued titan of the C-suite or the flamboyant “DJ D-Sol” known for frequenting music festivals. Instead, Solomon appeared to be contrite.
The second significant restructuring since he became chief executive four years ago was in effect an admission that the bank was under pressure from investors, who had become increasingly dubious of its ambitions to launch a viable consumer brand after years of losses and high staff turnover.
“I appreciate the comment that shareholders haven’t been excited about it,” Solomon said of the foray into consumer banking during a call with investors. “And that certainly affects some of our decision making.”
Dan Dees and Jim Esposito, who run the investment bank, and Ashok Varadhan, co-head of the trading division, will run the combined global banking and markets business. Stephanie Cohen, a close Solomon ally and most recently co-head of Goldman’s soon-to-be bygone consumer and wealth management division, will lead the new Platform Solutions unit.
A big winner of the reshuffle appears to be Marc Nachmann, who through his work co-leading Goldman’s trading division and investment bank has established a reputation for fixating on costs. He will run the combined asset and wealth management business. Julian Salisbury, previously co-head of the standalone asset management division, will become chief investment officer of the asset and wealth business.
“Marc’s ‘the fixer’,” said one Goldman banker. “Private wealth and asset management are about to experience what it’s like to work with Marc, which they definitely have not experienced before.”
For Solomon, much is riding on whether this latest overhaul can succeed where the last one fell short. “Now, unfortunately for David, the clock is beginning to tick,” the Goldman banker said.
Additional reporting by Brooke Masters
This story originally appeared on: Financial Times - Author:Joshua Franklin
