Morning Coffee: What did Steven Mnuchin do at Goldman Sachs? M&A banker spends 10 years giving advice for free

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It's starting to look like former Goldman Sachs banker Steven Mnuchin will indeed be Treasury Secretary under Donald Trump. Bloomberg reports that Mnuchin has been 'recommended by Donald Trump’s transition team', and that his promotion awaits the president elect's endorsement (or not).

Having been Trump's finance chairman during the campaign, Mnuchin is already closely allied to President-elect Trump but this would take things to a whole new level. It would also suggest that the revolving door between Goldman Sachs and government is back in play, and that Trump's anti-elitism doesn't extend to former Goldman bankers, second generation.

Indeed, as ex-Goldman bankers go it's hard to find anyone with a more gilded backstory than Mnuchin. His father, Robert, spent 30 years at Goldman Sachs and was a member of the management committee and a partner in charge of equity trading for ten of them. When Robert Mnuchin left Goldman in 1990, he was heralded as 'one of the most important figures in the equities business for almost two decades.' His son, Steven, joined Goldman five years earlier after a traineeship at Salmon Brothers; it's hard to imagine that his family name didn't give Steven a head start - particularly as his brother, Alan Mnuchin also just happened to be working for the firm at that time.

Mnuchin junior didn't go into his father's equities division at Goldman though. Instead, his time at Salomon equipped him for a career in fixed income trading at the firm. Bloomberg reports that Steven Mnuchin was "front and center" for the advent of some the most controversial financial products of the era, like collateralized debt obligations. Ultimately, he rose to become partner and head of mortgages, U.S. governments, money markets and municipal bonds at Goldman, along with chief information officer (CIO).

Mnuchin was a Goldman partner when the firm went public in 1999. With a 0.6% stake in the firm, he was one of an elite group of partners with a higher than average holding, worth a reported $46m.  With that money in the bank, he quit.

When Mnuchin's father left Goldman, he declared that he was off to, pursue, "broader, different interests, and a life that doesn't have to be structured unless I choose for it to be.'' However, when Steven Mnuchin left Goldman, he started by joining a hedge fund founded by his former Yale room mate, before moving on to become CEO of a hedge fund backed by George Soros. Subsequently, he co-founded another hedge fund, Dune, with two Goldman partners and was offered $32bn of Merrill's crisis era CDOs for just $8bn by then Merrill CEO and Goldman alum John Thain - something he seemingly turned down.

Steven Mnuchin's post-Goldman existence hasn't just been about hedge funds. He also financed some well known movies (American Sniper) and spent a period as CEO of OneWest Bank (which was reprimanded for its harsh attempts at foreclosing on families in New York around the time he joined). And now he's Treasury Secretary. Shares in Goldman are up 15% since the election. This clearly isn't just the Mnuchin effect, but having an alum whose family is deeply tied to the bank as Treasury secretary can't be a bad thing.

Separately, the Financial Times reports that Lars Andersson, an M&A banker who helped Morgan Stanley earn up to $120m for advising Monsanto on its $66bn sale to Bayer in September, is leaving to launch a boutique advisory firm. This in itself is something of an inevitability nowadays. What's notable is that Andersson reportedly spent more than a decade prior to his $120m advising Monsanto for no fee.


The number of new finance jobs in London fell 17% year-on-year in October. New applicants were only down 7%. (WSJ)

Chris Rokos' hot new hedge fund is raising more cash - it wants an additional $2bn (Financial News)

Boris Johnson likes Donald Trump because he's a "dealmaker." (Politico) 

John Cryan cancelled an appearance at panel to discuss the future of Deutsche Bank. (Bloomberg) 

CME Group might establish a clearing house in Dublin. (Bloomberg) 

A London technology headhunter got calls from three senior Silicon Valley executives in the 24 hours after Donald Trump's election victory, with the tech execs "explicitly" saying they were interested in moving to Britain to escape a Trump Presidency. (Business Insider)

"My biggest concern is whenever the ECB will start this tapering and what will happen then.” (Bloomberg) 

If you look good in the office, you'll earn 20% more than if you don't. (Harpers) 




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