As everyone waits for Goldman Sachs' new five year strategy to be announced in February, it seems Goldman won't just be hiring for 'platform' businesses in the year to come. The U.S. bank's mid-market cross markets group (CMG) will end the year with 150 bankers after it was set up in April 2019 – and there are more hires to come.
Sources say Goldman has plans to recruit "significant" numbers of staff to the M&A cross markets group, and to add muscle to financing and deal execution capabilities after building out its industry teams this year.
The new group marks a significant expansion of Goldman's investment banking division under CEO David Solomon. The aim of CMG is to deliver Goldman Sachs’ investment banking products to companies with revenues of $500m to $2bn. CMG, which is run globally by Will Bousquette, is therefore a move by Goldman to boost revenues outside its traditional large-cap M&A franchise where it is perennially ranked number one and sees less scope for growth.
Serving medium-sized companies is not new at Goldman but in the past it was done on a more ad-hoc basis within the bank’s existing industry teams. CMG is a effectively a mini-me of Goldman's large cap capability – the 150-strong global team comprises industry coverage bankers, M&A dealmakers and the bank’s existing mid-market lending effort. Goldman has staffed the unit with a combination of lateral moves and external hires and that will continue in 2020.
The team is heavily weighted towards the U.S. where it has around 100 bankers. Will Bousquette heads the group globally based in NY, while David Friedland is global head of M&A for CMG and head of Americas. Within CMG, David Kamo is head of Americas M&A and Dan Zarkowsky is head of Americas Financing . But CMG is a global initiative and Goldman has been hiring aggressively as well in Europe, where the team is led by Rob Pulford and has recruited almost a dozen bankers along with lateral moves.
With dedicated groups there’s always a risk that siloes and fiefdoms could result, but Goldman has tried to avoid that by keeping all of its industry bankers on the same floor, irrespective of whether they work in CMG or the investment banking division. Plus, any revenues from deals are double-counted when it comes to compensation, with both the CMG coverage officer and the Goldman industry banker getting deal credit regardless of who originated it.
If you’re a M&A banker with a client list in the U.S. mid-market then 2020 could be a bumper year. In a short space of time, the US mid-market has become the most sought-after segment as it comprises thousands of fast-growing companies which are either owned by financial sponsors or looking to move to the next stage through acquisitions.
Goldman is not the only bank looking to clean up here. In the U.S., JP Morgan, Wells Fargo and Citigroup are also active having set up regional offices and hired bankers, while BofA Securities has also made a big foray into this area of the market which is usually the preserve of boutiques.
In 2019, BofA established its emerging growth and regional coverage unit, which houses its U.S. regional investment banking coverage with a focus on emerging private companies spanning multiple industries including tech, ecommerce, consumer fintech, cleantech and biotech. BofA’s mid-market team has more than 100 bankers covering 1,300 companies across 21 cities in the US – and it plans to hire at least a dozen more in 2020.
Goldman Sachs and BofA declined to comment for this article.
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