Where in the world Goldman Sachs falls behind as a market leader
A number of investment bankers have recently left Goldman Sachs. Hugh Falcon, a director in Goldman's Australian equity capital markets (ECM) division, has left for Macquarie. Luigi Rizzo, head of European financial M&A at Goldman, is leaving to become EMEA head of M&A at Bank of America. Christian Kames, a senior automative-focused M&A banker at Goldman in Germany, is leaving for Citigroup. Dorothee Blessing, former head of German M&A at Goldman, has left for destinations unknown.
It may not be a flood and the departures may or may not be voluntary, but the trickle of exits highlights an overlooked fact: In some parts of the world, Goldman Sachs is not a market leader in investment banking.
Figures from data provider Dealogic for aggregate fees earned from M&A and capital markets work (equity and debt offerings) show that for year-to-date 2013, Goldman ranks below the top five firms for investment banking fees in Canada (7th), China (7th), the UK (7th), Japan (8th), Australia (8th), Italy (7th) and Russia (12th).
In Germany, Goldman ranks first for aggregate investment banking fees so far in 2013, up from 6th for the same period of 2012. But in M&A, it ranked sixth for the first quarter, compared to Citi's third. Could Kames' departure for Citi be conceived as upgrading?
In Australia, Goldman ranks outside the top 10 for ECM, whereas Macquarie ranks second according to Dealogic.
Goldman declined to comment on Dealogic's figures or on staff departures. When it announced its fourth quarter results in January, the bank said it derived around 50% of its revenues outside the US. In November, Mark Schwartz, a Beijing-based vice chairman at Goldman Sachs, said the bank was prioritizing the building-out of its China business. According to Dealogic, Goldman has increased its standing in China for aggregate investment banking fees from 12th in year-to-date 2012 to 7th this year.
The market leader for investment banking in Asia Pac (ex-Japan) is UBS, which has a 7.9% share of investment banking fees across the region according to Dealogic (compared to Goldman's 3.8%). UBS is making 10,000 redundancies over the next three years, although few of them are likely to fall in Asia. The Swiss bank said today that it wants to expand its Asian corporate and advisory headcount by 10% over the next three years.
According to Dealogic's revenue rankings, Goldman may not be a market leader in particular countries. However, it's still the pre-eminent bank worldwide. "Goldman Sachs is the world's leading investment bank and trading house," said banking analyst Brad Hintze of Bernstein Research in February: "In mergers and acquisitions advisory, a 40% pre-tax margin business, Goldman leads the business with a 12% market share since 2009."