Late last week, Goldman Sachs announced the creation of a sustainable finance group – a new team that will focus on impact investing as well as financing sustainable commercial projects. Here are some key takeaways from the new initiative, including some details on hiring plans.
Who’s running it?
The group is being led by John Goldstein, who joined Goldman Sachs as a managing director in 2015 after the bank’s asset management arm acquired Imprint Capital, the sustainable investing firm Goldstein co-founded back in 2007. He’ll be joined by fellow MDs Kyung-Ah Park, head of environmental markets at Goldman Sachs, and Kara Succoso Mangone, who has spent the last decade in investor relations. Mangone will serve as the chief operating officer.
The team has already grown and is looking to hire
Despite officially announcing the initiative last week, the group has already added at least three current Goldman employees to the team – vice president Kevin Smith, associate Aylin Altan and analyst Riddhima Yadav, all of whom have experience working on environmental, social and governance (ESG) projects. Moreover, Goldman is also currently advertising for a VP/executive director and an associate with experience working in an investing or markets-related role along with a deep understanding of ESG issues. The two job descriptions are rather open-ended in terms of seniority and desired backgrounds, suggesting Goldman could be looking to make multiple hires. (Banks in general will often advertise similar openings at every level when they are looking to fill out a team with multiple hires).
What they’ll be doing
Based on the memo sent to employees along with Goldstein’s personal message on his social media page, the focus certainly appears to be impact investing and financing ESG projects. However, Goldman and Goldstein pointed to two specific priorities: climate change and projects that accelerate more inclusive economic growth. The new unit will also extend itself beyond investing. The bank said it will work with a cross-divisional “steering group” of senior executives to provide expertise across advisory, risk management and asset management as well.
In short, none of the functions are truly new to Goldman; the creation of the group appears to be more of an effort to bring everything under one banner and grow the business. Previous to the launch of the new team, Goldstein told The Economist that impact investing requires a “full-time dedicated, research-oriented team with its own independent investment process.” Now he has exactly that.
More than just a trend
While impact investing has been talked about for some time, the most recent push across the industry has been helped by growing client interest and, more importantly, strong returns. Private equity firms KKR & Co., Bain Capital and TPG have found success with recent sustainability-focused funds, while rival Blackstone just hired an MD from Goldman itself to lead a new impact investing strategy.
Goldstein acknowledged to Impact Alpha back in May that the initiative has the same goal in mind as other investment focuses: to churn out profits. Impact investing is not just for clients who care about these factors, “but for clients who care about making money on risk-adjusted basis,” he said.
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