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“There is no reason why you need to walk to a branch to do banking," a top Goldman Sachs executive says.
Slack (WORK) is the most recent listing, hitting the exchanges today and immediately surging more than 50% from its reference price. Slack has taken a much different approach to make their share available to the general public.
DEEP DIVE Semiconductor stocks led a broad U.S. rally on Tuesday, as investors cheered both the latest comments about economic stimulus from European Central Bank President Mario Draghi and President Donald Trump’s tweet about his talks with China’s leader, and as the Federal Open Market Committee began its two-day policy meeting.
(Bloomberg) -- Goldman Sachs Group Inc. is finally embracing its status as a private equity giant.The firm’s top executives in recent months have laid out plans to raise more client funds for private investing and rely less on its own balance sheet. As part of that effort, the bank will consolidate the investing activities of multiple units across the firm to add more heft to its merchant banking division, the firm said Monday in a memo to staff.Goldman’s special situations group, a trading unit which made investments in everything from equity stakes in private companies to middle-market loans and illiquid debt, will combine with the merchant banking division. They’ll be joined by a pair of real estate units and principal strategic investment group, which makes fintech wagers, according to the memo. Julian Salisbury, head of SSG, will join Andrew Wolff and Sumit Rajpal as co-head of merchant banking.“There actually is a very, very significant alternatives asset manager inside Goldman Sachs,” which has operated from a number of different units in the past, Chief Executive Officer David Solomon told Bloomberg Television in April, when asked whether he aimed to create something akin to Blackstone Group LP. “We see opportunities to expand what we’re doing for clients in that business and be a little more focused on growing our client franchise around those activities.”Under Solomon, who rose to CEO in October, the firm has been honing its strategy for the private investing business, looking to make it operate more efficiently and profitably, while relying more on fees than investment gains. Rich Friedman, who led the merchant banking unit for 21 years, handed off leadership in April to Wolff and Rajpal. The shakeup also gave Salisbury, head of the special situations group, oversight of real estate across the firm.Goldman Sachs has long been unique among Wall Street banks in the size of investments it makes with its own funds -- the firm had $20 billion in private equity investments at the end of 2018. While the company’s status as a major investor has raised conflicts for its investment bankers, it’s also been hugely profitable. Investing and lending, the reporting segment that includes the merchant bank division, contributed higher pretax profit than the firm’s trading or investment banking businesses last year.John Waldron, the firm’s president, said at an industry conference last month that the bank will look to court institutional investors with its ability to offer private equity deals and public market strategies.“This is going to be a long-term journey,” he said at the Bernstein Strategic Decisions Conference. “We’re not going to turn this battleship from balance sheet investing to fee income overnight.”Goldman shares have fallen 18% in the past year, compared with the 1.3% decline in the Standard and Poor’s 500 Financials Index. The broader S&P 500 Index climbed 3.8%.(Adds company memo starting in second paragraph.)\--With assistance from Zoya Khan, Gillian Tan and David Scheer.To contact the reporter on this story: Sridhar Natarajan in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Michael J. Moore at email@example.com, Daniel TaubFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Giving George Kurtz millions of dollars will rank among Goldman Sachs Group Inc.’s safest deals.The bank loaned CrowdStrike Holdings Inc.’s chief executive officer about $10 million to exercise stock options and pay taxes, according to the software-maker’s prospectus. Kurtz pledged as collateral a quarter of his 10% stake in CrowdStrike, whose market value has nearly doubled since Tuesday’s initial public offering, making Kurtz a billionaire. His pledged shares alone are now worth $320 million, based on Thursday’s closing price of $67.56. The stock fell 5% on Friday.The transaction offers a glimpse at how the rich can leverage their assets for liquidity and the perks banks offer ultra-wealthy clients. Investor Najeeb Al Humaidhi last year received a 375 million pound ($474 million) margin loan from banks working on Aston Martin’s IPO, a person familiar with the transaction said at the time. Among the mega-wealthy, Elon Musk has used his shares in Tesla Inc. to obtain personal loans, while Oracle Corp. Chairman Larry Ellison has put up millions of the company’s shares to fund a lavish lifestyle that includes trophy properties, America’s Cup teams and the Indian Wells tennis facility in California.Read More: Goldman, Morgan Stanley want to lend the ultra-rich more moneyCrowdStrike’s initial offering of 18 million shares priced at $34 each -- above its already elevated target range -- bolstering Goldman’s position as the global IPO leader this year by issued equity volume. Tuesday’s sale was led by Goldman, JPMorgan Chase & Co., Bank of America Corp. and Barclays Plc.A spokesman for CrowdStrike didn’t immediately respond to a request for comment, while Goldman Sachs declined to comment.Founded in 2011 by former McAfee Inc. executives including Kurtz, CrowdStrike makes software to protect clients from cyberattacks. With the IPO, Kurtz joins a wave of billionaires -- including Zscaler Inc. founder Jay Chaudhry and the China-born brothers behind Fortinet Inc. -- to emerge this year from cybersecurity businesses.Kurtz, 48, who has a net worth of about $1 billion, according to the Bloomberg Billionaires Index, wasn’t the only CrowdStrike employee to secure Goldman financing. Chief Financial Officer Burt Podbere used most of his stake to obtain a loan of as much as $3.7 million from the investment bank for the same purposes as his colleague, according to the prospectus. His stake is now worth almost 25 times that sum after CrowdStrike’s share spike.Kurtz founded his first online security firm two decades ago and sold it to McAfee in 2004 for $86 million. He worked at McAfee for seven years, becoming global chief technology officer. He left the year after Intel Corp. announced its $7.7 billion purchase of the firm in 2010.(Updates with closing share price in second paragraph.)\--With assistance from Devon Pendleton, Sridhar Natarajan and Tom Maloney.To contact the reporter on this story: Ben Stupples in London at firstname.lastname@example.orgTo contact the editors responsible for this story: Pierre Paulden at email@example.com, Steven CrabillFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
After two years of surging payouts as regulators relaxed the reins on the biggest lenders, those firms are likely to boost dividends and buybacks by just 3% following this year’s stress test, according to analysts’ estimates compiled by Bloomberg. The Federal Reserve will release results of the first part of its annual review next week. Payouts to shareholders started to ramp up in 2016 after the Fed was satisfied that the largest lenders had adequately beefed up loss buffers and improved risk management.
Chinese factory output slowed to its weakest pace on record last month, adding to pressure on Beijing to unleash further fiscal and monetary stimulus as the trade war with the US remains unresolved. US trade talks stalled in May, with US president Donald Trump announcing Washington would raise tariffs on $200bn of Chinese goods by 25 per cent and put telecoms group Huawei on a restricted export list. Beijing retaliated by increasing levies on about $60bn of US imports this month, though customs data showed Chinese exports beat expectations in May partly as companies rushed to ship orders before the new tariffs went into effect.
Tang will be part of the portfolio strategy and risk group co-headed by Michael Buchanan, said the people, who asked not to be identified as the appointment is not public. Representatives for Temasek and Goldman Sachs declined to comment. China accounted for just over a quarter of Temasek’s S$308 billion ($225 billion) of assets as of March 2018, second only to Singapore.
Unfortunately for investors, a 3% haircut in advisory fees and fund expenses—a level that’s all too common—makes a huge difference in how fast your wealth grows. If you add up all of the fees in your portfolio, it may reveal a “silent killer” that can devastate your account balances over your working career or a lengthy retirement. For example, let’s say your financial adviser or 401(k) plan provider charges an annual fee of 1% of assets under management.
(Bloomberg) -- Wall Street banks are taking their unicorn playbooks to China.After arranging billions of dollars in loans for highly valued -- and money-losing -- U.S. startups like Uber Technologies Inc., banks including Morgan Stanley and Goldman Sachs Group Inc. are angling to do the same for some of China’s biggest unicorns. They helped Bytedance Ltd., owner of the wildly popular TikTok video app, borrow $1.3 billion in April and are said to be raising as much as $1.4 billion for two other Chinese tech startups -- borrowers that until recently had rarely tapped the syndicated loan market.Banks are betting the loans will lead to more lucrative mandates like initial public offerings, just as they did in the U.S. with mega-listings by Uber and several of its peers. But that’s no guarantee as China’s trade war with America spreads to the technology industry, heightening investor concerns over frothy valuations.While banks earned an average margin of 145 basis points over benchmark rates on five-year syndicated loans for Chinese borrowers this year, the juiciest fees come from follow-on services like equity issuance. Underwriters have charged 5% to 6% of the float value for U.S. debut share offerings in recent years and between 2% and 3% in Hong Kong, though fees are sometimes lower for larger offerings, according to data compiled by Bloomberg.“The returns on these loans are usually acceptable, given that leverage tends to be low and given the expected future cross-sell opportunities, including future capital markets and trade financing,” said Benjamin Ng, head of Asia Pacific debt syndicate and acquisition finance at Citigroup Inc. in Hong Kong.Morgan Stanley, the lead sponsor of Uber’s IPO in May, earned $41 million from that deal, about a year after the bank helped arrange a $1.1 billion loan for the ride-hailing company, according to data compiled by Bloomberg. Dropbox Inc. tapped banks including Goldman for a $600 million credit facility in 2017, people familiar with the matter said at the time, about a year before the cloud storage company went public. Goldman was one of the IPO’s lead underwriters.“Banks have gotten a lot more comfortable lending to these asset-light companies,” said Vey-Sern Ling, an analyst at Bloomberg Intelligence in Hong Kong. “If your competitor is lending to these billion-dollar startups, you can’t not be there.”Goldman Sachs declined to comment while Morgan Stanley didn’t reply to requests for comment. They were bookrunners on Bytedance’s loan and are now leading a facility of as much as $1 billion for Beike Zhaofang, which runs an online property brokerage.Loans appeal to Chinese unicorns because they can be arranged quickly with few public disclosures, a plus for young companies that want to avoid giving away too much information to competitors, according to Andrew Ashman, the Singapore-based head of loan syndicate for Asia Pacific at Barclays Plc.Historically low borrowing costs add to the allure. Bytedance, which was valued at $75 billion in a funding round late last year, offered an interest margin of 280 basis points over Libor for its loan in April. Beike asked banks for an interest margin of 210 basis points, people familiar with the matter said in May.Bytedance and Beike declined to comment. So did Guazi.com, an online marketplace for used cars that’s in talks with banks to borrow as much as $400 million, according to people familiar with the matter.While Barclays predicts similar deals will emerge in the second half, there are plenty of headwinds. Chief among them is the escalating China-U.S. conflict, which has expanded beyond tariffs in recent months to encompass parts of the tech industry and threatens to weigh on global economic growth.That’s adding to investor jitters about overstretched valuations for companies with unproven business models. Uber and rival Lyft Inc. are both trading below their IPO prices, while Luckin Coffee Inc. -- a Chinese rival to Starbucks Corp. that reported a loss of about $241 million last year -- has dropped 15% from its post-IPO high earlier this month. The MSCI China Technology Index has slumped more than 20% over the past year.If the U.S.-China spat drags on, banks could be waiting a long time for their unicorn paydays.(Updates with Goldman Sachs declining to comment.)\--With assistance from Zheping Huang and Lulu Yilun Chen.To contact the reporters on this story: Carol Zhong in Hong Kong at firstname.lastname@example.org;Crystal Tse in Hong Kong at email@example.comTo contact the editors responsible for this story: Neha D'silva at firstname.lastname@example.org, ;Fion Li at email@example.com, Michael Patterson, Lianting TuFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Saga has announced that chief executive Lance Batchelor is to leave, following a turbulent time for the provider of products for the over-fifties that has lost more than two-thirds of its market value in a year. On Wednesday Saga said Mr Batchelor, who is 55, would retire at the end of the current financial year in January 2020, after six years with the company. Saga said he would not receive any payments under the long-term incentive plan for the current financial year.
A European attempt to build a battery maker that can challenge Tesla and Asian rivals has won the backing of Volkswagen, Goldman Sachs, Ikea and BMW, helping the Swedish project to raise $1bn of fresh ...
The hard-charging investment bankers at Goldman Sachs have found a new target for their expertise — the genteel world of the British retiree. Goldman plans to team up its UK consumer operation with Saga, which specialises in products and services for the over-50s, as part of the international expansion of its retail banking arm. , which accepted its first UK depositors in August and offered one of the highest interest rates in the country, will become Saga’s long-term savings partner.
The slick, dark-suited bankers at Goldman Sachs carve up companies and serve corporate titans. Since its launch three years ago in the US and last September in the UK, its Marcus online bank’s deposit base has expanded to $46bn. Within a few quarters it could overtake the $56bn in deposits from Goldman’s rich private bank clients.
The Dow Jones Industrial Average has been on a tear over the past several sessions, with the current string of six straight gains putting blue chips on pace for the best point accumulation over a six-session stretch this year. According to Dow Jones Market Data, the Dow's streak of six straight gains would represent the best point tally (1,340 points) over a series of six days since Dec. 3, 2018, and the best percentage climb thus far, about 5.4%, since Jan. 11. Gains have been supported, at least partly, by expectations that the Federal Reserve will ease monetary policy this year. Monday's early climb for the price-weighted Dow was buttressed by gains in Goldman Sachs Group Inc. and Apple Inc. .
Financial stocks enjoyed a broad rally Monday, after President Trump's declaration that he would not impose tariffs on imports from Mexico helped push up Treasury yields and spark a broader stock market rally. The SPDR Financial Select Sector ETF jumped 1.1%, with 63 of 67 components trading higher. Among the more heavily weighted components, shares of Goldman Sachs Group Inc. gained 2.5% to pace the Dow Jones Industrial Average's gainers, while J.P. Morgan Chase & Co.'s stock was in second with a 1.5% rise. Elsewhere, shares of Citigroup Inc. jumped 2.6% to pace the financial ETF's gainers, Bank of America Corp. hiked up 2.4% and Wells Fargo & Co. advanced 1.4%. The Dow gained 148 points, or 0.6%, and the yield on the 10-year Treasury note rose 4.5 basis points to 2.129%. Higher longer-term yields can help boost bank profits, as the spread between what banks earn on longer-term assets, such as loans, the cost of shorter-term liabilities used to fund those assets widens.
The currency made gains in Asian and European trading to rise as much as 2.5 per cent against the dollar to reach 19.13 pesos, clawing back all of the losses sparked by the tariffs announcement at the end of May. It later gave up some of those advances to trade up 1.8 per cent at 19.29 pesos by early afternoon in London. Donald Trump “indefinitely suspended” tariffs on all Mexican goods late on Friday with Mexico promising to take what the US president called “strong measures” to stop migration at America’s southern border, ending eight days of uncertainty since the levies were announced. Under the deal announced on Friday night, Mexico agreed to deploy its new National Guard police force to beef up its border with Guatemala. It also agreed that migrants applying for asylum in the US would to be “rapidly” returned to Mexico pending US court hearings.
Goldman Sachs Group Inc. may seek to manage more of the fortunes of Europe’s wealthy as the Wall Street brokerage looks to expand beyond the volatile returns of equity and bond trading. The New York-based firm currently only has a “single-digit” share of the European wealth management industry, Chief Financial Officer Stephen Scherr said in an interview with Francine Lacqua. An acquisition would help Goldman Sachs compete in an industry dominated by Swiss banks UBS Group AG and Credit Suisse Group AG.
With financial markets discounting at least two quarter-point Fed interest-rate cuts by year-end -- one more than the case just days ago -- the Fed’s conference on policy strategy, tools and communication in Chicago will be closely watched. If Fed Chairman Jerome Powell, who gives opening remarks Tuesday, wanted to counter the quickly emerging consensus about easing, he has a platform to do so. “We now see a base case in which the Fed will reluctantly cut rates three times starting in September,” Krishna Guha and Ernie Tedeschi at Evercore ISI wrote Monday.