Goldman Sachs has named record numbers of female and black partners as part of the high-profile ritual the Wall Street bank conducts every two years to fill its elite ranks.
The 80 members of the class of 2022 make up the largest group of new partners since David Solomon became chief executive and said he wanted to make the role more selective. The bank on Wednesday said the class is its most diverse ever, with 23 women and 28 non-white partners, seven of who are black, as well as two people who identify as being LGBT+.
The new partners reflect Solomon’s repeated efforts to boost Goldman’s standing with investors by broadening its lines of business beyond its investment banking and trading divisions, thereby making its earnings less volatile. Fewer of the new partners are Goldman lifers than in the past, and nearly 30 per cent of them are from consumer, wealth and asset management businesses that the chief executive is counting on for steady revenue.
Last month Solomon announced another significant reorganisation that will bring those three businesses together, while separately combining Goldman’s successful investment banking and global markets businesses into a single division. The latter business lines accounted for 60 per cent of the partner promotions.
Of the new partners, 10 per cent are from engineering and service departments such as risk and compliance.
Solomon has generally shrunken the number of new partners at Goldman since taking over from Lloyd Blankfein, who led the bank from 2006 until late 2018, while trying to increase the perks and benefits reserved for the elite group.
In recent years several partners, particularly in the investment banking division, have left Goldman to pursue more lucrative careers at boutique advisory firms and private equity groups. Some have privately said that the reason they decided to quit the partnership was partly because of Solomon’s decision to shift the bank’s focus towards areas such as consumer banking, which have not historically been in Goldman’s DNA.
Only 43 per cent of the new group joined Goldman right out of college or graduate school, while 57 per cent worked elsewhere first. This represents a sharp drop from previous years, when more than half of new partners had spent their whole banking careers at the group.
Two-thirds of the new partners are based in the US, while the share in Asia and the Pacific was just 7.5 per cent, well down from 14 per cent in 2016, the last very large class.
“Our commitment to elevating leaders who embody our core values of partnership, client service, excellence and integrity remains steadfast,” Solomon and John Waldron, president, said in an internal memo. “Each of our new partners has contributed meaningfully to our business and culture.”
The promotions come a year after Goldman announced a record large class of managing directors, the rank right below partner, and attributed the growth to its need to build up asset and wealth management. Most other Wall Street groups consider managing director to be the top rank outside of management. Goldman’s use of a prestigious class above that dates back to its many years as a private partnership.