Wall Street: Goldman’s new partner class

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10 THINGS ON WALL STREET

Hiya! It's Dan DeFrancesco checking in from NYC. It's been a long week for many of us, but we're almost there.

On tap today we've got the latest on the FTX-Binance drama, Elon's plans for turning Twitter into a fintech, and how to navigate your next job interview

But first, the picks are in for one of the most exclusive clubs on Wall Street.


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David Solomon, CEO of Goldman Sachs, 2018 Vanity Fair New Establishment Summit

1. Welcome to the good life at Goldman.

One of the most prestigious banks on Wall Street has opened its books for a select few. 

Goldman Sachs announced its latest partner class on Wednesday, a once-every-two-years tradition identifying the cream of the crop at a firm that prides itself on only hiring the cream of the crop.

Roughly 1% of Goldman's employees reach partner status, and the perks are commensurate with the exclusivity of the title. (More on that here.

This is the third partnership class picked under CEO David Solomon and also his largest, with 80 new partners named. If you are interested in learning more about some of the new partners, we profiled five of the most interesting ones here.

When I wrote about the upcoming class a few weeks ago, I asked Insider's chief finance correspondent Dakin Campbell about what to expect. Dakin — the foremost expert on Goldman Sachs (my words, not his) — astutely predicted this class would likely be Solomon's largest as the bank looks to restock its ranks.

Since being an editor is all about relying on people who are much smarter than you, I decided to go back to the well again and ask Dakin for some top-of-mind thoughts.

Sales and trading: 27 partners (34% of total class)

The takeaway: In many ways, this should come as no surprise. Trading has always been one of Goldman's crown jewels. However, as Dakin pointed out to me, it's worth noting that Goldman has made a big push to rely less on trading under Solomon. This class, however, is evidence of how difficult a task that is. 

Investment banking: 21 partners (26% of total class)

The takeaway: The second largest contingent of this class comes from investment banking, which is also somewhat expected. Setting aside this year, IB is traditionally a gold mine for the bank. It's only natural people in that business get rewarded. But with 60% of the class coming from IB and trading, and the context of Goldman's decision to consolidate those businesses into one group, it paints a picture of how powerful that one unit will be at the bank going forward, Dakin noted.

Asset management: 17 partners (21% of total class)

The takeaway: Perhaps the biggest surprise of the bunch, Dakin noted, as it's a larger number than some might expect. While not as sexy as investment banking or trading, asset management still generates plenty of revenue for the bank, and oftentimes with a lot less headaches. In 2021, Goldman saw $14.92 billion in net revenue from the division along with a 28% return on average common equity, which trailed only the investment bank. 

Consumer and wealth management: 6 partners (8% of total class)

The takeaway: Goldman's consumer business was the biggest casualty of the recent reorganization, as the group was folded into a unit that includes wealth and asset management. As Dakin reported over the summer, Goldman's ambitions of becoming your friendly neighborhood bank have not panned out as they hoped. As a result, you wouldn't expect to see a large swath of new partners emerge from the group, Dakin said.

Engineering, research, back-office (aka the non-revenue drivers): 9 partners (11% of total class)

The takeaway: While not an official division or unit within the bank, I thought it was worthwhile to break this group out. One of the key sticking points under Solomon about the partnership has been rewarding revenue producers, as Dakin has previously reported. As critical as back- and middle-office roles can be, particularly those in tech, it's difficult to establish how much money they're driving into the firm. Still, with the exodus of tech talent from Marcus last year and the importance the firm has always put on engineering, it's interesting to see such a small cohort rewarded.

Click here to see the 80 people who just joined one of Wall Street's most exclusive clubs.

And check out our mini profiles of five of the new partners that have had interesting career paths.


In other news:

Liverpool's Egyptian midfielder Mohamed Salah (L) celebrates scoring his team's third goal with Liverpool's English defender Trent Alexander-Arnold during the English Premier League football match between Norwich City and Liverpool

2. Walmart is pitching its own employees on the digital bank it backs. One is now being advertised to the retail giant's staffers, according to a leaked memo viewed by Insider. Here's how they're trying to sell employees on it.  

3. That FTX-Binance deal isn't happening. Binance has called it quits on acquiring the troubled crypto exchange. Meanwhile, Binance's CEO Changpeng "CZ" Zhao has said a takeover of FTX would not be a "win for us," but there is no denying that Sam Bankman-Fried's cratering wealth now positions CZ as the top person in crypto

4. Things are getting bad in real estate. Redfin, a real estate brokerage, announced its second round of layoffs this year, cutting 13% of its employees. Read the full memo announcing the news. We've also got a rundown of the layoffs across the real-estate industry.

5. If you thought your job was tough, at least you're not an ad exec at Twitter. Meet Robin Wheeler, the person tasked with leading Twitter's global ad sales team

6. Elon is going back to his roots. The billionaire, who was part of the PayPal Mafia all those years ago, hinted at some future plans in the space that including a high-yield savings account. 

7. Massive layoffs hit Meta. The social-media giant cut 11,000 employees, or 13% of its staff, in a move that has been looming for months. Here's some analysis on how it all went so wrong.  

8. Here's who is in the market for Liverpool FC. One of the world's biggest soccer clubs is expected to cost as much as $4.6 billion, and a private-equity firm is reportedly interested. Here's who could buy the club

9. When they ask, "Do you have any more questions?" here's how you should respond. We mapped out the best questions to ask at the end of a job interview. Here's hoping you don't need to use it, but just in case

10. There's a lot to worry about in the world right now, here's one thing to put your mind at ease. A doctor that specializes in men's sexual health says there is no "normal" amount of sex you should be having. Here's why.


Keep updated with the latest business news throughout your day by checking out The Refresh from Insider, a dynamic audio news brief. Listen here.


Edited by Jeffrey Cane (tweet @jeffrey_cane) in New York and Hallam Bullock (tweet @hallam_bullock) in London. 

 

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