![]() ![]() And especially of people who can help build its relationships with banks and asset managers Moreover, Goldman has particularly focused this year's hires on Europe, with over half coming in EMEA. Source: Goldman Sachs 5.And especially in Europe. As the chart below shows, Goldman's already hired twice as many people into its fixed income business this year as last year, with a focus on sales and less on strats and market making (trading). Goldman's been doing some big fixed income hiring, especially in sales.Īs Goldman goes for $333bn a year of extra revenues in FICC, it's going to be hiring. Meanwhile, the firm seems to be deliberately jettisoning hedge fund clients and banks and brokers (even though it says it wants to drill down into the banking sector and become a top three liquidity provider for more banks, as per point eight below). In the first half of 2017, Goldman increased sales credits from its asset management clients by 6% year-on-year. And it's already had some success in this. It has a significant opportunity to increase its penetration with corporate clients. As the chart below shows, around half of Goldman's fixed income clients now are hedge funds and asset managers. So, how does Goldman plan to grow its FICC revenues by $1bn in three years? Fundamentally, by targeting the areas where it's under-represented. Goldman plans to grow in fixed income, currencies and commodities trading by pushing into the areas where it's under-represented. Goldman is "intensely focused" on the recent weak performance in FICC, Schwartz added. If the market gets better, if the yield curve steepens, if volatility makes a comeback, there will be "additional upside". Schwartz said these FICC revenues should come through even if the market remains weak. Schwartz was at pains to stress that this isn't a set of targets - it's just a "comprehensive plan" and a look at "what's happening under the hood" already at Goldman.įundamentally, the firm intends to raise revenues by $5bn+ over the next three years and $1bn of this is expected to come from FICC. Goldman's got a growth plan, outlined in the chart below. ![]() Goldman's got a three year revenue growth plan and it doesn't care if the market remains challenging This might be why Goldman's share price rose 1.8% on opening after Schwartz's presentation, but has since fallen back again. Analysts at KBW note that the firm's overall strategy is focused on penetrating markets Goldman hasn't been in historically and that this could be harder than it seems. Whether this is really the case remains to be seen. Basically Goldman is hiring in fixed income and thinks it's got a growth plan. After a succession of miserable quarters in fixed income sales and trading which Goldman Sachs was "not satisfied with", ex-CFO and current COO Harvey Schwartz made his presentation explaining what Goldman plans to do about it and why the bank's fixed income currencies and commodities (FICC) business is still a good bet - not withstanding the fact that he also described the environment for the bank's FICC business in the third quarter as, "pretty challenging". ![]()
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