The group is the shift under management of the investment bank, which earlier this year elevated Marc Nachmann and Gregg Lemkau along with John Waldron as co-heads.
Released at Wed, 11 October 2017 18:33:25 +0000
Led by Goldman dealmakers Brian DeCenzo and James Morris, the group will perform a different role than traditional bankers focused broadly on pitching mergers and acquisitions to large companies, the people familiar with the matter said, asking not to be named because they aren’t authorized to speak to the media.
Morris and DeCenzo were formerly part of Goldman’s financial sponsors group, which scouts for private equity companies in deals.
The organization hired dealmakers from Wall Street rivals in the partner level, and has added cities like Atlanta and Dallas and bankers to serve customers closely. They have installed developers to increase productivity and provide better advice to clients.
After facing angry questions Goldman last month introduced a plan to boost annual earnings by $5 billion.
The Wall Street bank is forming a group, known internally as the Innovation Lab, focused on creating compelling deal suggestions for companies like Warren Buffett’s conglomerate Berkshire Hathaway Inc (BRKa.N) or Japan’s SoftBank Group Corp’s (9984.
Analysts expect when it reports third-quarter results on Tuesday, building on two consecutive quarters of 23, more trading pain to be revealed by Goldman.
That trend has accelerated.
A Goldman spokeswoman declined to comment on the group.
Management has also expanded into areas like consumer lending, and has emphasized Goldman’s roots as a strategic adviser to investment capital, wealthy families and corporations.
Reporting by Olivia Oran in New York; Editing by Meredith Mazzilli and Lauren Tara LaCapra
The group is expected to think of out-of-the box ideas and focus on customers who want to acquire or make enormous investments in businesses and don’t fit neatly into categories, like technology or industrials, that sector bankers pay.
But while fees from those services can be more reliable than trading, analysts say Goldman won’t replace the income from its stock and bond market heyday .
The new team will analyze trends across sectors like the effects of oil prices in addition to spotting deal opportunities.
“Many investors still see it as a ‘show me’ story because the initiatives are in businesses that are highly competitive,” stated Steven Chubak, a banking analyst with Instinet.
See graphic on how investment banking is rising in value for Goldman Sachs
Berkshire owns over 90 businesses across aerospace, energy industrials, financials, transportation, consumer products and food. Meanwhile, SoftBank’s Vision Fund has invested in companies which range from satellite startup OneWeb to asset manager Fortress Investment Group LLC (FIG.N).