Goldman Sachs is hiring. As Goldman co-COO Harvey Schwartz set out last October, the firm has a strategy for rebuilding its under-performing sales and trading businesses and earning an additional $1.5bn in revenues.
In a presentation today, Goldman CEO Lloyd Blankfein explained precisely how the bank is going about this, and who it's recruiting in the process. If you want a job at Goldman now, the bottom line is that it will help if you're a strategist ("strat").
Strats at Goldman are a fusion of technologists and quants. Blankfein said today that Goldman's "strats" already account for 25% of the firm's total headcount in its fixed income, currencies and commodities division, and that the bank's "competitive advantage in engineering" will be a "key differentiator" for the future. As Goldman chases revenues, it's all about "best execution, content and analytics," said Blankfein. In equities in particular, the firm is after quantitative hedge fund clients, to whom it wants to push its electronic execution and prime financing services.
Goldman is currently advertising around 50 strats roles globally, but the focus on engineering and quant talent is nothing new. Last year, Blankfein said Goldman added 100 people focused on electronic trading,70 of whom were engineers. The 2017 hires included Jeff Wecker from Bridgewater Associates and Mike Blum, the former chief technology officer at KCG Holdings. Thalia Chryssikou, Goldman's co-head of global sales strats and structuring across FICC and equities, said previously that 27% of the experienced hires in Goldman's FICC division were strats in 2017.
The push towards quant and engineering hires at Goldman comes after Marty Chavez, the former chief information officer became chief financial officer in December 2016. As CFO, Chavez has a higher profile both internally and externally. Blankfein said today that Marquee, the initiative pioneered by Chavez to make Goldman's SecDB risk and pricing database directly accessible to clients, has already signed up 7,000 unique users, up 60% on last year.
Goldman's focus on engineers and quants looks like bad news for old school sales traders who rely upon relationships. Nonetheless, as we reported this morning, Goldman is hiring senior sales traders to its equities business - it just added Mark Hibbert, the former co-head of U.S. sales trading at Deutsche Bank. Blankfein's emphasis on "content" along with best execution and analytics suggests that Goldman is conscious of the need to sell trade ideas as well actual trading systems.
LB also reiterated Goldman's intention of building up its coverage of corporate clients. The firm's fixed income business was "damaged" by its "small corporate footprint" last year, he said. This is being remedied, presumably with new salespeople who can make corporate inroads.
Now that volatility's back, Blankfein also made encouraging noises about the potential for fixed income, currencies and commodities (FICC) revenues in 2018. There's a, "more attractive opportunity set", he said, noting that Goldman cut FICC headcount by 20% between 2012 and 2017 and slashed FICC risk weighted assets by 50% between 2013 and 2017. As the FICC "opportunity set" returns, both might creep up again - but quants and technologists will be at the front of the queue when it comes to hires.
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