Goldman Sachs wants to strengthen its credit trading business. So said Credit Suisse banking analyst Susan Roth Katze after meeting with the bank last week. After a succession of truly dismal quarters in fixed income trading, Goldman has figured something must be done. Strengthening credit (particularly flow credit) trading and emerging markets trading is reportedly part of the answer.
True enough, Goldman is doing some hiring. This month, it's recruited Harley Golding, an associate-level high yield trader from Morgan Stanley. It's also hired Chi-Young Ryu, a Frankfurt-based VP-level credit saleswoman from Barclays.
Golding and Ryu are small beer though: the big new beasts in Goldman's credit business arrived before the firm's intention of strengthening its bench was even made public.
The biggest name to quietly turn up at Goldman this year was Daniel Friedman, the former head of European high yield and distressed credit at Barclays. Friedman's move seemingly went unreported. His light at Goldman still isn't illuminated on Bloomberg, but he's most definitely present (and is thought to have joined in Q1) and headhunters say he's got a mandate to strengthen that business. "He's rejigging high yield for them," says one, speaking on condition of anonymity. "They're getting more balance sheet, holding more inventory."
In Europe, Goldman's flow credit business is run by Manav Gupta, while Friedman now runs high yield. Headhunters say Luca Lombardi oversees the business as a whole. If hiring happens, these will be the men behind it.
Other existing hires to Goldman's London credit business in 2017 include Miran Serdarevic and David Bodenstein, both of whom joined from Deutsche Bank in May, with Serdarevic joining in a senior real money sales role and Bodenstein joining as a senior credit trader for financials. Similarly, Thomas Blondin, a former managing director and head of emerging markets trading for Central and Eastern Europe, Middle East and Africa (CEEMEA) at Cantor Fitzgerald, turned up at Goldman as an executive director-level emerging markets trader in May.
Is this really a credit build though? While Goldman's been hiring in credit, it's also lost people. There were exits to BNP Paribas in the second quarter and Sharut Kalra, a senior credit trader, left for Barclays (where she's building a CLO franchise) in the first quarter. There have also been exits from the emerging markets team to Nomura and elsewhere. On a longer horizon, Goldman's credit business has been hit by multiple exits to hedge funds in the past three years
So far, therefore, headhunters say Goldman's credit "build" has been more about replacement than accretion. In 2018, however, this may change. "Goldman's a tier two house when it comes to flow credit trading," says one London fixed income headhunter. "It looks like it wants to change that."