Goldman Sachs Said to Sell Online Platform for Structured Notes

(Bloomberg) -- Goldman Sachs Group Inc. sold a web platform that helped market complex bond-like instruments to mom-and-pop investors, according to people with knowledge of the matter.

The bank agreed to sell a majority stake in the operation, known as Simon, which will start operating as an independent entity in coming months, the people said, asking not to be identified because the information isn’t public. The deal values Simon at a little more than $75 million, one of the people said. The identity of the investors hasn’t been announced.

Jason Broder, head of the private investor products group at Goldman Sachs, will leave the bank with the completion of the deal, the people said. Timur Kocaoglu and Joseph Giordano will also exit, according to the people. A spokesman for Goldman Sachs declined to comment.

Simon is a website that helps retail brokers offer structured notes to clients. It was meant to attract rival banks to sell the notes and help boost the size of the market, where Goldman Sachs is one of the largest issuers. But the bank’s ownership was a sticking point with competitors, making them slower to embrace the product.

The separation into an independent platform is aimed at easing some of those concerns, the people said.

Structured notes have grown increasingly attractive to retail investors because they often pay higher interest than regular corporate debt and usually track the performance of an underlying market. But their complexity and the use of derivatives have also drawn concern about their suitability for mom-and-pop investors, who might not understand the risks.

Goldman Sachs’s decision to cleave out the internally developed technology product was in line with its recent efforts to monetize such tools.

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