Last year, as Goldman Sachs axed more than its usual 10% clear out, senior fixed income sales staff felt the bulk of the cuts. This year, they’re leaving of their own accord.
The latest departure is Andrew Armstrong, a managing director in credit sales who joined the bank from Bank of America Merrill Lynch in June 2011. He’s switched to the buy-side, signing up to distressed debt hedge fund Castlelake Partners as a senior sourcer, hard assets.
Armstrong has spent his entire career on the sell-side, having also formerly worked at both Barclays Capital and J.P. Morgan in credit sales positions.
Castlelake has around $8.9bn in assets under management and 107 employees across its offices in London and Minneapolis. The latter is by far the biggest presence – the FCA register suggests that it has just 10 employees in London.
Goldman Sachs’ limp performance in the first quarter was largely pinned on its inability to capitalise on the uptick in credit revenues that spurred big gains in the majority of its rivals’ fixed income divisions. As we mentioned, banks are increasingly switching to focus on selling to corporates, which trade more frequently, and Goldman’s sales team is more geared to towards institutional clients and hedge funds.
But Goldman’s fixed income sales shrinkage has been going on for more than a year. It announced plans to axe 10% of its fixed income sales team in January last year, and by March a number of MDs had departed both in credit and macro products.
Armstrong, meanwhile, appears to be capitalising on a trend among investment banking sales staff to move into buy-side firms as ‘sourcers’ – namely hunter gatherer types bringing in either money to manage or uncovering physical assets.
Xavier Clement, who previously worked for Bank of America Merrill Lynch in Paris, has joined Oaktree Capital Management in London, while Cedric Beaumont, head of secondary and loan trading at Natixis and David Roca, head of loan sales at BBVA, have both joined investment manager Strategic Value Partners (SVP).