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THE DISARMING BANKER
By Ben White and David Wighton
Monday, January 08, 2007
At7:30am on Tuesday, an hour before Goldman Sachs was to report the most profitable year in Wall Street history, Lloyd Blankfein, its chief executive, gathered senior employees in an auditorium in lower Manhattan. Instead of striding to the podium and delivering a formal speech, as his predecessor Hank Paulson had done, Mr Blankfein tossed off his coat, rolled up his sleeves and stood in the crowd Speaking for 20 minutes without notes, he reviewed the record results in precise detail and discussed the bank's strategy for the coming year. He closed by urging some of the world's most highly paid executives to be humble in the face of such extraordinary success and to spend time with loved ones over the holidays (a directive most will almost certainly ignore). It was classic Blankfein. The shortish and baldish former gold salesman is about as far from the popular image of a Wall Street titan as you can get. But behind the self-deprecating wit and affable manner lies a formidable Harvard-trained mind, a mastery of operational detail and a fierce ambition to turn Goldman into an even more dominant force. The 52-year old took the helm from Mr Paulson this spring with Goldman at the height of its powers. Earnings soared 70 per cent to a record $9.5bn this year largely on the back of trading and investing strategies for which Mr Blankfein had been responsible as head of its dominant fixed income division. But this runaway success poses challenges for Mr Blankfein. Can things possibly get any better on his watch, or will grumbling among corporate clients, that Goldman puts its own interest before theirs, intensify? And how will Goldman fare when the extremely favourable market conditions of the last few years finally come to an end? Like many who make it to the top on Wall Street, Mr Blankfein came from a humble background. Son of a postal worker, he grew up in subsidised housing in the New York borough of Brooklyn, went to a tough local school and put himself through Harvard and Harvard Law School on scholarships. After working briefly as a tax lawyer he applied – unsuccessfully – for a job at Goldman. He eventually got in through the back door, becoming a gold salesman at J. Aron just before Goldman bought the commodities company. “He had a personality that made you want to be around him,” says Dennis Suskind, a former Goldman partner who hired him. “He made you laugh but he had an extremely serious side. He was a sponge for information and was extremely hard working. He was able to both manage up and manage down.” In 1994, Mr Blankfein was named Goldman's co-head of commodities and in 1997 moved to London as co-head of fixed income where he helped manage the bank's response to the 1998 financial crisis. Over the next few years, he quietly overtook more high profile contenders from the investment banking side and won the top job easily upon Mr Paulson's departure to become US Treasury secretary. He now presides over one of the most prodigious wealth-generating machines in history. Goldman is paying an average of $620,000 to its 26,500 staff this year. Mr Blankfein will get at least $50m and some top traders could reap even more. This bonanza comes at a time of growing concern about the widening gulf between rich and poor in America. It is a concern shared by Mr Blankfein and many others at the top of Goldman Sachs, which has a culture of public service and philanthropy. Mr Blankfein, who has $500m of Goldman stock, has been known to disparage bankers who are happy just to be “another rich guy in New York”. Like most senior Goldman executives, Mr Blankfein avoids conspicuous displays of wealth, though he is planning to move with his wife and three children into a new $27m apartment in a glitzy development off Central Park West. The interest in philanthropy should not be misinterpreted. “He is as commercial as anyone I have ever met,” says Glenn Dubin, co-founder of hedge fund group Highbridge Capital. “But he has an appreciation of where he came from and of giving back.” One of Mr Blankfein's main non-profit commitments is as a director of the Dubin focused on alleviating Robin Hood Foundation, a charity chaired by Mr Dubin says people are surprised to meet the chairman of poverty in New York. Mr Goldman Sachs and find he is “incredibly funny and incredibly friendly”. But the affability can be deceptive, according to one long-time colleague now at another bank. “He has extraordinary empathy and extraordinary toughness. Since the two do not often go together, his toughness can often surprise people.” Some observers say that toughness is evident in the way he has encouraged the recent departure of a number of senior executives. “There is much more of a clique than under his predecessor,” says one former executive. The departures include Scott Kapnick, one of the three co-heads of investment banking, and, most recently, Suzanne Nora Johnson, a vice-chairman and the bank's most senior woman executive. These exits have added to concerns that investment bankers are losing influence to those who have come up through the trading operations. The remarkable growth of the trading businesses in recent years means they swamp the profit contribution from investment bankers who advise companies on deals and help them raise money. Some of the bankers feel Goldman increasingly puts its interests as an investor ahead of its clients'. Many clients would agree. These concerns came to a head this summer when some important clients complained about Goldman's involvement in several failed bids for large UK companies. But Mr Blankfein stresses the importance of Goldman's client relationships for the rest of the business and is confident it can handle the potential conflicts of interest. Some observers believe the bigger threat for Goldman is the prospect of a global financial crisis. Mr Blankfein has a strong record as a risk-manager and has ensured that the bank has a massive cash horde to help it trade through a crisis. One of his favourite lines is that he has “not felt this good since 1998”, just before the Russian default threatened to swamp Goldman and global financial markets. “We've had enough market dislocations over the last dozen-plus years to know there will be another,” says Stephen Friedman, a Goldman director and former senior partner. “But Lloyd is someone who knows trees don't grow to the sky and you don't have unending expansion without rough bumps along the way.”
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发表于 2007-3-18 22:35:00
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