The departure of three partners from Goldman Sachs on Monday this week was followed a day later by the exit of Lisa Opoku, who had been running the bank’s wealth management business.
The departures are the latest in a clutch of senior partners who have left the Wall Street bank this year, heaping the pressure on chief executive David Solomon as he struggles to overcome an expensive foray into consumer lending and a slowdown in the bank’s investment banking business.
Other notable departures since January include Mike Koester, the 25-year veteran who was co-president of the group’s alternative investments business and was said to be a “beloved” figure inside the bank. Julian Salisbury, chief investment officer for asset and wealth management, Dina Powell, head of Goldman’s business covering sovereign wealth funds, and Joe Montesano, head of equity trading for the Americas, have also left since the start of the year.
Goldman insiders say the departures are part of the normal turnover at the bank and are reminiscent of the period following the financial crisis in 2008 or 1998, when the bank delayed an initial public offering.
They also take comfort from the fact that many of the executives who have left become part of the highly influential network of Goldman alumni on Wall Street that go on to become clients at their new employers, whether that be in the hedge fund industry or in private equity.
But others inside the bank worry that the exodus of top talent is sapping morale and that the knowledge walking out of the door will take years to replace.
“If you don’t have aspirational mentors, it becomes difficult to stay,” said one insider. Read more on the exodus at Goldman Sachs.
Here’s what I’m keeping tabs on today:
Donald Trump’s arraignment: The former US president is expected to appear in a Washington courtroom at 4pm after being accused of attempting to overturn the results of the 2020 election. Here’s what to expect.
Results: Apple, Amazon, Airbnb, Coinbase, ConocoPhillips, Moderna, Warner Bros Discovery, Kellogg, Expedia and Hasbro are among the companies reporting earnings today.
Economic data: Economists anticipate initial US state unemployment claims, a proxy for job cuts, to have increased last week. Separately, the July ISM services purchasing managers’ index is expected to fall slightly.
UK interest rates: The Bank of England is expected to further tighten monetary policy as it tries to stamp out inflation, which is running at nearly four times its official target.
Five more top stories
1. Investors are increasing bets that Europe will sink into a painful economic downturn, in growing contrast to the conviction in financial markets that the US is headed for a “soft landing”. Read more on the diverging European and US economies.
2. Brookfield Asset Management and Sequoia Heritage, a $16bn fund that manages the wealth of Silicon Valley, are creating an investment vehicle to capitalise on plunging valuations of venture capital-backed companies. Read more on the new company which will be led by a former Oaktree Capital executive.
3. Two people found guilty in a corruption scandal involving KPMG and the US audit regulator are set to have their convictions dropped, after prosecutors conceded they had misinterpreted the law. Read more on the case.
4. Tom Brady, the former New England Patriots’ and the Tampa Bay Buccaneers’ quarterback, has taken a stake in English football club Birmingham City. The Midland’s team, which competes in the second tier of English football, was taken over by a company led by US financier Tom Wagner last month. Read more on Brady’s plans for the club.
5. Global law firms and corporate counsel are warning of a “massive” challenge to the centuries-old concept of attorney-client privilege after a federal judge in New York last week ordered the details of seven clients to be released. Read more on the controversial ruling.
The Big Read
Bonds have long been considered the most boring bit of finance, but they have played an integral role in the development of human society, funding everything from wars and railways to Tesla’s electric cars and Netflix. Alphaville editor Robin Wigglesworth sketches a very short, very wild history of the market that will shape the next financial crisis.
We’re also reading and listening to . . .
Trump’s co-conspirators: Although the six co-conspirators were not identified in Tuesday’s indictment they are likely to be characters in Trump’s orbit.
Women’s football: Aly Wagner, a former player on the US women’s national team, explains how she helped get Bay FC off the ground with the help of a novel funding model.
Weather forecasting: The science of predicting ever more extreme meteorological events is becoming more sophisticated and accurate.
Chart of the day
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The Banco Central do Brasil yesterday became the second Latin American central bank within a week to cut its main lending rate, in the latest sign that the region is getting on top of inflation. Chile was the first to lower its main policy rate and others are expected to follow. “Latin American central banks can take a victory lap,” said one economist.
Take a break from the news
George Orwell’s warnings about state control and surveillance are often invoked — especially now, in the age of artificial intelligence and big data. But if the legacy is secure, his reputation is less so. Two biographies offer contrasting perspectives on the author, and the invisible life of his first wife.
Additional contributions by Tee Zhuo and Benjamin Wilhelm
Source: Economy - ft.com
