In theory, Goldman Sachs is building out its electronic trading business. Incoming CEO David Solomon said in June that the firm is moving away from its "cash business, flow business and electronic platforms" as it pursues $1.5bn in extra fixed income trading revenues and $0.5bn in extra equities trading revenues. In reality, a surprising number of people seem to been quitting Goldman's electronic trading platform for rivals, particularly in New York.
Around seven people, many of them vice presidents (VPs) or executive directors (EDs) have left Goldman's NYC electronic trading business in the past three months. Few of them have been reported.
The exits include Steve Leo, an electronic trading coverage professional who spent 11 years at Goldman and who quit in July. He's now at UBS in NYC. There's also Jared Pollard, a VP in Goldman's equities business, who left in July and is now at RBC. There's: Nick Uljaj, a VP in electronic trading technology at Goldman, who also left around July (for J.P. Morgan); Alex Sahu, a former member of Goldman's cash algo strats team, who quit (in July) and just turned up at Citadel; Hunter McMaster, a former associate on the team who's understood to have left for Morgan Stanley; Matthew Mendoza, a former sales trader on Goldman's NYC electronic trading and multi-asset platform, who left for Citadel in August. And...there's Bill Jacobs, a New York-based VP in securities strats, who's understood to have resigned recently (but is still registered with GS and is on the firm's internal directory.)
The departures in New York come as Goldman recently lost Gordon Ball, a former executive director director in its London equities business, to Citi. Ball joined Citi as EMEA head of electronic execution this month. He was followed by Max Middleton, a Cambridge graduate who spent eight years on Goldman's electronic trading desk. Meanwhile, Alex Skrypnik, a London-based quant developer left in July to become a director in electronic trading at Citi.
Goldman Sachs didn't immediately comment on the U.S. exodus. However, the global flow hasn't been entirely one way: there's been plenty of hiring in London. In July, Goldman hired Tim Rohkemper from Credit Suisse as an executive director for its London electronic trading desk. It also hired Matt Kilsby, the former chief operating officer of Systematica Investments, as a managing director in London, plus traders from Instinet and Cannacord (in London). And then there have been various hires into the London quantitative execution services team. This month Goldman hired Salim Benkirane from SocGen for its systematic trading team.
The staff churn comes after Goldman hired Mike Blum, the former chief technology officer at high frequency trading firm KCG Holdings in October last year. Blum arrived with a mandate to sharpen-up Goldman's electronic trading systems after years of comparative neglect. - Bloomberg observed that Goldman lost its edge in trading to Morgan Stanley after its rival pursued excellence in algorithmic trading after the financial crisis and GS did not.
Goldman Sachs insiders say the firm's outdated electronic trading product is part of the problem. So too, though, is the influx of new hires. "Management are diluting the culture with outsiders," says one. Solomon has added five executive directors and one managing director to Goldman's securities business in the past two months. It doesn't help that existing traders are already concerned about bonuses this year, particularly as the CEO seems quite likely to prioritize the investment banking division over securities when the time for splitting the compensation pot comes.
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