Goldman Sachs Moves Commodity Sales Team Into Investment Bank
(Bloomberg) -- Goldman Sachs Group Inc., which last year posted the worst commodities-trading revenue in 19 years as a public company, is moving commodities sales chief Colleen Foster and part of her team from the securities division into the investment-banking unit.
Foster, who joined Goldman Sachs in 1999 and rose to become partner in 2006, will fold her team into the financing group of the investment-banking division, according to a memo sent to staff Monday. The move aims to strengthen the Wall Street firm’s ability to sell commodities financing and hedging services to corporate clients. The group has been dubbed the commodities solutions team.
Chief Executive Officer Lloyd Blankfein has been seeking ways to revive a commodities business that for decades was Wall Street’s most dominant. Last year’s stumble with losing oil and natural gas trades triggered an informal review of the unit and several high-profile departures, including global commodities head Gregory Agran. By the fourth quarter, the bank had exited many losing trades and slashed risk-taking.
The company has sought to turn around the trading performance by leaning on the relationships its investment bankers have with corporate clients. It formed a joint venture between the securities and investment-banking divisions, which delivered 16 new mandates from the fall through mid-February, Blankfein said last month.
“The fact is that we’ve underutilized the power of our leading investment-banking franchise to serve as a risk manager and liquidity provider to more companies,” Blankfein said at the February presentation. “We’re changing that.”
Tiffany Galvin-Cohen, a Goldman Sachs spokeswoman, declined to provide a number for how many people are on the new team. About 40 percent of the commodities salesmen covering corporate clients will make the shift, she said. The bank had about 180 traders and salespeople across all of commodities last year.
Josh Struzziery will replace Foster as global head of commodities sales in the securities division, according to a person briefed on the appointment, who asked not to be identified because the move wasn’t yet public.
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