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Like other asset managers, Goldman Sachs’ asset management arm, GSAM, is taking advantage of a glut of top i-banking talent made available by the financial crisis and subsequent regulation, Reuters reports.GSAM Global co-head, Sheila Patel, says about one fifth of the the unit’s hires since 2008 have come from the investment bank realm, because at the moment, ‘buyside’ looks to many of those bankers like the oasis in an insecure job market.
“We found people with a very high calibre that wanted a change or saw how things were going on in their own organisations that made them uncomfortable or worried for their stability,” Patel said.
GSAM has increased its headcount by 25% over the past two years, at the same time as its been fighting to regain its once-vaunted reputation as one of the world’s premier asset managers. Revenue is down, investors have been pulling their cash out, neither of which is helped by the departure of high-ranking executives.
Fresh talent and insight is one way to boost an ailing unit.
The benefits of taking on i-bankers has some connection to the changing way that asset managers do business now, and what clients want from their fund managers today.
Patel told Reuters,
(Asset management) is a very different business than it was 10 years ago, there’s such an advisory component to it, and such a need to understand the underlying (corporate) fundamentals. That requires a lot of different thinkers. It may well be that the right person on the ground to help our insurance clients from an asset management perspective is someone who has been their investment banker for 10 years.
No doubt a portion of those bankers come from prop trading desks that have been shuttered in the wake of Dodd-Frank.