Goldman Sachs faces a possible leadership crisis after two more top executives reportedly said they are leaving the Wall Street giant amid embattled CEO David Solomon’s push to overhaul its key asset management division.
Julian Salisbury, Goldman’s chief investment officer of asset and wealth management, and Takashi Murata, co-head of the bank’s Asia-Pacific private investments unit, will join an exodus of partners from the vital division, people familiar with the matter told The Wall Street Journal.
Salisbury’s exit after a 25-year stint raises the tally to six of the 11 Goldman partners named in a company memo last year — as part of an overhaul of asset management — who have left or are on their way out, according to the Journal.
Solomon, whose leadership and management style have been called into question, has a lot riding on the success of the asset and wealth management team — particularly in the wake of his failed foray into consumer banking. Last week, Goldman reported its worst earnings in three years.
The departures of experienced bankers have fueled concerns that Goldman will have to rely on those with less know-how to steer a division of the business with which they have less familiarity, according to The Journal.
Others who have recently left include Luke Sarsfield, who spent less than a year as co-head of asset management, and Katie Koch, chief investment officer of public equity.
Solomon combined Goldman’s asset and wealth management divisions this past October — a move meant to signal the bank’s pivot away from a sole focus on investment banking and trading.
Goldman has an estimated $2.7 trillion in assets under management across its equities, private equity, credit, and fixed income divisions.
But the newly combined entity’s revenues are dwarfed by the dollars generated from Goldman’s bread-and-butter investment banking and trading businesses.
The bank said it aims to generate $10 billion next year in fees from clients who have plowed investments into the asset and wealth management division.
“We have talented, tenured investment leaders, and we surround them with the resources of the firm,” Marc Nachmann, Goldman’s global head of asset and wealth management, told The Journal.
“Our attrition rate is the lowest in years for the investors who are doing the work of evaluating the actual investments at a granular level.”
“Goldman Sachs professionals are in high demand, and while some will always find opportunities elsewhere, we feel good about the continuity of the team and the people we can attract,” Nachmann added.
Last week, Goldman reported a 58% drop in earnings for the second quarter — falling short of Wall Street estimates.
Goldman reported that it earned $3.08 a share — lower than the $3.18 analysts had predicted — while its revenue plummeted 8% to $10.9 billion.
The results were the bank’s worst since the second quarter of 2020, when it took writedowns over a corruption scandal linked to Malaysian state fund 1MDB.
Goldman took a $504 million hit tied to its GreenSky business, which facilitates home improvement loans to consumers, and $485 million related to its real estate investments.
Goldman agreed to acquire GreenSky for $2.2 billion in 2021 and later closed the deal at $1.7 billion.
The bank also took $615 million in credit losses including writedowns related to its consumer loans and business.
Goldman’s Marcus unit was also folded into its merged asset and wealth management arm last year, as the investment bank began pulling back from retail banking.
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