Goldman Sachs has been going through some massive changes under CEO David Solomon.
It’s taken big steps involving transparency and inclusion to change up its culture. After its first-ever investor day in early 2020, the firm is looking to execute on targets including multi-year cost-cutting plans. And it’s making big pushes into businesses like wealth management and consumer banking.
Now, the elite Wall Street bank is finally launching its do-it-yourself wealth management offering to the public, marking a milestone in the elite firm’s quest to appeal to Main Street. Goldman rolled out Marcus Invest, its automated investment tool with a $1,000 account minimum, on Tuesday after having previously faced delays.
Solomon, who took the reins as CEO in 2018, has also looked to reduce the number of partners at the firm in order to make the status more elite and exclusive. In 2018, there were 484 partners. But as of the latest announcement of the newest partner additions, Goldman’s total partners amounted to fewer than 440.
Meanwhile, the upper echelons of one of Goldman Sachs’ most prestigious businesses, its investment banking division, has seen some high-profile exits in recent months.
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Goldman in September shuffled its setup, creating a new standalone consumer division that includes its Marcus lending unit as well as its wealth-management and private-banking businesses.
Strategy chief Stephanie Cohen and Tucker York, the head of the private-wealth business, were tapped to colead the new consumer and wealth management division and the changes went into effect on Jan. 1.
The change eliminated the former consumer and investment management division, which held the consumer business and the asset-management unit known as Goldman Sachs asset management.
The new setup matches the way Goldman reports financial results, a change the firm made in 2019 to better align with how Solomon wanted investors to think about the firm. Goldman now has four divisions: consumer and wealth management, asset management, investment banking, and global markets.
Wealth management, asset management, and consumer banking
In Goldman Sachs’s quest to move down-market, part of its wealth management division is preparing to expand by hiring dozens of financial advisors.
Goldman has been on a quest to manage money for clients less wealthy than the multi-millionaires to whom the bank has long catered.
Goldman launched Marcus, a digital-only consumer bank, in 2016. And in 2019, it took the plunge into the consumer credit-card business by teaming up with Apple to launch both brands’ first consumer credit-card offering.
The Apple Card hasn’t been the only way that Goldman is teaming up with Big Tech names. Amazon has partnered with Goldman Sachs to offer loans to its merchants. And Stripe is partnering with banks including Goldman Sachs and Citi to offer business-banking services.
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The Wall Street bank in January named two executives who previously worked on the firmwide strategy team to spearhead a newly formed group devoted to consumer and wealth-specific strategy and acquisitions. Jemma Wolfe and Stephan Lambert will head up the new team, according to an internal memo seen by Insider. It also tapped six people to lead product development for the consumer and wealth group.
And Swati Bhatia, a former Stripe exec, is joining the firm as a partner to lead Goldman’s direct-to-consumer strategy. Bhatia was most recently the chief payments risk officer at Stripe, the online payments startup last valued at $36 billion.
When Goldman announced its latest class of partners, one group was particularly well-represented on the list. Seven of the 19 investment bankers elevated to partner status came from the bank’s powerhouse technology, media, and telecommunications group.
Goldman Sachs’ entire investment-banking business ranks number one in mergers and acquisitions and bookrunning for equity capital markets, according to Dealogic.
Goldman has worked on some of the hottest IPOs of 2020, including DoorDash. It’s also got a pipeline of big names lined up for this year – as Business Insider first reported, the bank has been tapped to lead cryptocurrency exchange Coinbase’s planned offering.
The firm also played a role in massive debt financings for travel-related companies during the coronavirus pandemic. One of the solutions was a first-of-its-kind deal helping United raise $6.8 billion in debt in June by leveraging its frequent flyer program.
The group has also seen some shakeups in recent months. Goldman Sachs veteran Gregg Lemkau, co-head of the firm’s investment banking division since 2017 and a member of Goldman’s management committee, left at the end of 2020. Instacart has tapped Nick Giovanni, Goldman Sachs’ head of the global technology, media and telecom group, to be its CFO. And in September, Goldman Sachs named new leadership in its M&A group.
In February, Susie Scher, previously co-head of global financing, was named chairman of Goldman’s global financing group. Scher is a member of the firm’s partnership committee and its executive committee for the investment-banking division. Vivek Bantwal, who was previously the chief operating officer of the global markets division, is returning to the investment bank to assume the role vacated by Scher.
Exits from Goldman Sachs
Ram Sundaram, the head of currencies and emerging-markets business at Goldman Sachs, is planning to exit the firm. Sundaram is a Goldman partner who was closely involved in the design and sale of the trades the bank did for the Malaysia development fund known as 1MDB. The bank reached a $3.9 billion settlement last year over its role in the trades. Sundaram has never been implicated in the scandal.
Last June, Sundaram solidified his position as a senior leader in Goldman’s mighty markets division when a colleague’s departure made him the only executive running the emerging-markets and currencies business.
What’s next for Goldman Sachs
Goldman Sachs itself is reportedly considering plans to shift asset management operations out of New York, where its headquarters tower over West Street in Manhattan’s financial district, to South Florida. Goldman’s move is not a done deal, but the reported plans echoed other New York-based firms’ recent moves.
And overall, Goldman is forging ahead with plans to divert more employees out of traditional banking capitals like New York, London, and Hong Kong to lower-cost cities including Salt Lake City, Dallas, and Bangalore, India.
Goldman’s relocation efforts are part of a broader strategy laid out at the bank’s investor day last January, which is directed at slashing $1.3 billion in costs over the course of three years.