Goldman Sachs CEO Lloyd Blankfein and COO Gary Cohn have been quietly overhauling the bank’s asset management arm, GSAM, “in moves designed to tether it more closely to its parent,” former employees of the bank’s unit tell Bloomberg Markets Magazine.
Apparently GSAM “formed a separate culture – academic, collegial, less cutthroat” in its Old Slip street offices, which were several blocks away from the bank’s former Broad St headquarters.
The unit, before now has been run by several men, including Peter Kraus and John McNulty – both of whom are credited with establishing the particular GSAM culture.
But now Blankfein is determined to “Goldmanize” the unit.
Apparently with their former sovereigntly gone, several portfolio managers have left the firm.
Former GSAM staffers told Bloomberg Markets Magazine,
The executive shake-ups are a relection of Blankfein’s determination to crush any independent tendencies at GSAM that might reflect the days of McNulty and Kraus.
Blankfein and his charges have pushed efforts to “Goldmanize” GSAM. Among other things, that means assessing perfornance in short-term, rather than long-term results.
Apparently bankers and traders looked down at GSAM’s money managers, and the group, according to one watcher, “has always been the stepchild at Goldman Sachs… It’s never been as sexy as investment banking, trading and private equity.”
The new efforts to Goldmanize GSAM include:
- Moving the unit into the bank’s new HQ on West Street, along with all the other bankers.
- The group, which used to be divided into 10 invetsment boutiques, is now consolidated into four groups.
- GSAM compensation is now determined by bank management, whereas it used to be tied directly to performance and revenue. Eg. A risk officer can now demand that portfolio managers cut holdings or reduce leverage, which apparently never used to be the case.
- Senior management has demanded hourly P&L statements, which also never used to happen, and which GSAM’ers say reflects the new “short-term, trading mind-set.”
For more on Goldman Sachs’ cult-like behaviour, click here to read one man’t opinion of what it’s like to date a Goldman woman.