- Goldman Sachs’ merchant banking division has been ground zero for CEO David Solomon’s push to build an alternatives-investing powerhouse by attracting third-party funds.
- The firm is planning to raise at least $100 billion over the next five years from outside investors, including many public pension funds that haven’t previously given their funds to Goldman.
- The strategy has meant a shift away from investing from its own balance sheet and required combining of several disparate teams from across the firm.
- While the merging of teams led to some turnover, the management team has stabilized in recent months.
- The following list includes the top 20 Goldman executives tapped to run the combined merchant banking division.
- Visit Business Insider’s homepage for more stories.
Goldman Sachs’ merchant banking division has been through a lot of change recently.
The business unit has been ground zero for CEO David Solomon’s plan to pivot the company away from making private-equity style investments from its balance sheet in favor of raising outside money in a third-party fund structure.
The strategy shift required bringing a handful of disparate investing teams scattered around the bank under the MBD umbrella. One of those was Goldman’s elite special situations group, which managed about $30 billion in investments from the securities division.
The merging of the teams required personnel changes, which sparked upheaval and some tense moments as execs jockeyed for power. The turmoil came to a head earlier this year when two of the MBD leaders chosen to lead the combined group, Sumit Rajpal and Andrew Wolff, left the bank after losing a power struggle.
Their departure left special situations chief Julian Salisbury in control of the division, with longtime MBD leader Rich Friedman holding down the chairman’s title.
Once Wolff and Rajpal left, it cleared the way for the two men to settle on a management team, which now features senior leaders from across MBD and the special situations group, as well as other investing teams. The team is now charged with spearheading Goldman’s efforts to raise at least $100 billion over the next five years for various alternative-investing strategies.
This year, the bank accelerated the raising of a fund dedicated to distressed situations as the coronavirus pandemic boosts expectations of a broad-scale reordering of industry, leading to new winners, and losers who need the type of financing that distressed funds like Goldman’s are only too happy to provide.
Last month, the company closed on $6 billion of commitments for the fund, known as West Street Strategic Solutions, and now expects to raise more than $10 billion over the coming months, CEO David Solomon said on the company’s earnings call. That’s an upsizing from an original aim to cap the fund at $10 billion.
To do so, the company is now pitching many pension funds who have not previously committed their billions to Goldman’s private-investing enterprise. The bank secured $350 million from the state of Connecticut’s pension system last month for a private-credit strategy that will be spread between several different funds over time.
Here’s a list of the 20 executives leading Goldman’s merchant banking division. All of them are partners, with a handful all making the grade in 2008.
Rich Friedman, chairman
Friedman is the dean of Goldman’s private equity and private credit strategy, having joined the precursor to the merchant banking division in 1991.
He built the business into a sprawling collection of funds that often competes with flashier firms like Blackstone, Carlyle, and KKR by investing more than $180 billion in real estate and infrastructure, private equity, and credit markets. With a total of $320 billion now under management, Goldman is one of the world’s top 5 alternative asset managers, according to the company.
Friedman is a member of Goldman’s management committee, and either chairs or co-chairs the investment committees for the entire firm, corporate, infrastructure and real estate, according to an official company biography. He made partner in 1990.
He was one of a select few Goldman execs last year to have a voice in thinking through Solomon’s plan to move Goldman away from a decades-old model of investing with its balance sheet.
A graduate of Brown University and the University of Chicago’s business school, Friedman is also the co-chair of the board of trustees at the Mount Sinai Health System that ranks as one of New York City’s largest hospital groups.
Earlier this year, he spearheaded an effort to procure 130,000 N95 masks for frontline healthcare workers by arranging, with other members of MBD, to get the masks out of China on short notice.
Julian Salisbury, global head
Salisbury is one of the Goldman partners who’s star has risen under the leadership of David Solomon.
A graduate of the UK’s Loughborough University, with a degree in sports science and a masters in biomechanics, he is a powerful Goldman partner with a key role leading the firm’s push to broaden and deepen its alternatives investing business.
Prior to his current role, Salisbury led Goldman’s special situations group. The unit enjoyed a reputation for being among Wall Street’s most tactical investors, and for being one of the most lucrative before the financial crisis and resulting bank rules limited firms’ abilities to make bets with their own capital. It’s also gotten a reputation for being secretive, and Salisbury keeps a relatively low profile.
He’s known to have Solomon’s ear, and like Friedman was involved in early discussions about moving Goldman away from the limitations of investing from its balance sheet. The exec survived a power struggle with MBD execs Andrew Wolff and Sumit Rajpal for control of the combined division and emerged as the victor.
He holds a seat on the management committee and co-chairs the partnership committee, giving him a voice in what are arguably Goldman’s two most powerful committees. He also co-chairs all of MBD’s investment committees.
Goldman’s distressed fund, West Street Strategic Solutions, is patterned after elements of the special situations group’s strategy. In putting together a pitch for the new fund, Goldman selected 60 representative investments made by SSG and others since 2009. Those investments, representing $15.7 billion of capital, delivered gross internal rate of return of 21%, according to the Connecticut presentation.
Prior to running global SSG, Salisbury was head of European special situations in London and also worked in Moscow. He held several research roles at the firm, as well. He joined Goldman in 1998 and was named partner a decade later. Before Goldman, he worked in the audit practice at KPMG.
Milton Millman, COO
Millman is a longtime Salisbury lieutenant who has spent more than 25 years at Goldman Sachs, including the last two decades in various roles at the special situations group.
A graduate of the the University of Texas at Austin, he joined Goldman in 1994 at the firm’s Dallas-based real estate asset management unit, according to a biography provided by the company. Several years later he moved to London to work in the unit’s international operations.
He joined the special situations group, which has historically made a lot of real estate-related investments, in 2000 when he moved to Tokyo to serve as CFO for the newly created Asia special situations group.
In 2003, he was part of the leadership team that created the Europe and Americas special situations group. He was named managing director in 2002 and partner in 2008.
Laurie Schmidt, CFO
Schmidt, on the other hand, is a longtime executive in the merchant banking division.
She’s responsible for all aspects of the merchant banking division’s financial and risk management duties, and works closely with other senior managers to develop the division’s strategic priorities.
Prior to her current role, she was head of investor reporting and fund management for MBD’s funds.
A graduate of business administration at Bucknell University, Schmidt joined Goldman as an associate in 2003 after several years in transaction services at PricewaterhouseCoopers. She was awarded Goldman’s most senior title in 2018 as part of Goldman’s most recent class of partners.
Mike Koester, CCO
As the division’s chief commercial officer, Koester holds a critical role overseeing fundraising in a period when the bank is trying to bring in more than $100 billion in outside money.
That makes him one of the point people for the pension fund clients that Goldman is hoping to attract to its platform, many of them for the first time. Koester, for example, was one of the Goldman leaders who presented to Connecticut officials last month and successfully secured a $350 million commitment.
He’s also the co-head of the firm’s Alternatives Capital Markets & Strategy Group, which leads capital raising and client strategy across the entirety of the firm’s alternatives offerings, including both direct investing and open architecture investments.
Koester joined Goldman in 1996, left and then rejoined three years later. He graduated from Colby College and got an MBA from the Tuck School of Business at Dartmouth College. He serves on the board of the American Investment Council, the private-equity industry’s chief lobbying association.
Chris Kojima, co-head of ACMS
Kojima shares leadership of the ACMS group with Koester, and brings a level of expertise in open architecture platforms.
Prior to getting his current role last year, Kojima ran the Alternative Investments and Manager Selection business within Goldman’s asset management group since its founding in 2008. The platform serves as a fund of funds, placing client money into dozens of handpicked hedge funds and private-equity funds vetted carefully by Goldman.
Kojima has degrees from the University of Manitoba, Cambridge University, and Harvard Law School, and he’s admitted to the New York Bar. He joined Goldman in 1995 and initially worked in leveraged finance before eventually joining Goldman Sachs Asset Management. Like others on this list, he made partner in 2008.
He serves on the firm’s partnership committee, as well as on the board of Launch with GS, the investment fund focused on supporting startups and other companies with diverse leaders.
Jim Garman, head of Europe
Garman succeeded Wolff as the head of MBD in Europe when the latter executive left the company earlier this year, and the region he oversees is a critical one for Goldman’s fundraising and investing plans.
The West Street Strategic Solutions fund, for example, plans to make some of its investments in the region, according to the Connecticut presentation.
Garman is also co-head of real-estate investing in Europe, and helps set MBD’s strategy around putting money to work in the strategy, according to an official biography.
He joined Goldman in 1992 and made partner in 2006. A graduate of Cambridge, he serves on the firm’s partnership committee and Europe’s management committee, as well as the MBD real-estate investment committee.
Stephanie Hui, co-head of Asia Pacific
Hui enjoys a reputation for being one of Goldman’s most prolific and successful investors, having led or overseen Goldman’s investments in Asia outside of Japan for many years.
As one of the most senior MBD leaders in Asia, Hui helped Friedman secure the 130,000 N95 masks for Mount Sinai.
In addition to her role overseeing Asia, Hui is also co-head of the growth investing business with Darren Cohen and Nishi Somaiya. And she serves on a recently created Global Equity Leadership Group, responsible for overseeing the firm’s investments in private equity more broadly.
The Harvard grad boasts a long history in the precursor to MBD, the Principal Investment Area, having joined Goldman in 1995 as an analyst. She left for Harvard Business School, and rejoined in 2000. In 2010, Hui made partner.
She serves on the Asia Pacific management committee, the partnership committee, and on the board of Launch with GS.
Takashi Murata, co-head of Asia Pacific
Murata is another example of a special situations exec now holding a senior leadership position in the combined MBD, though more so than others he has crossed over between the two groups for much of his career.
Murata, who also runs real estate for MBD in Asia, joined Goldman in 1998 as one of the founders of the Asia special situations group. After the great financial crisis, Murata joined the merchant banking division, though at just two years, it was a short stint.
In 2011, he returned to Asia SSG to run Japan, and a year later, led the build out of the Australia New Zealand SSG business. He was named to run Asia SSG in 2018 and took on his current role last year.
Murata graduated from the University of Pennsylvania in 1997. He was named partner in 2008.
Adrian Jones, chairman of the global equity business
Jones, one of three Irish citizens on this list (Tom Connolly and Tavis Cannell are the others), is the chairman of the global equity business, which means he has a seat on the investment committees for growth equity, infrastructure and corporate, according to an official biography.
He enjoys a more non-traditional background than many of his finance peers, attending the Irish Military College as a young man. He served as a lieutenant in the Irish Army and was a member of the United Nations Peacekeeping Force in Southern Lebanon for a year in the late 1980s, according to the biography.
The University College, Galway graduate then got a masters from University College, Dublin and an MBA from Harvard Business School.
He joined Goldman out of HBS in 1994 in investment banking, and in 1998, joined PIA in London. He moved to New York in 2002 and made partner two years later. He also serves on the firm’s Sustainable Finance Steering Group.
Brad Gross, head of corporate equity in the Americas and Europe
Gross, who has historically led MBD’s investments in the technology, media and telecom industries, actually got his start investing in real estate for Goldman Sachs.
He joined the firm in 1995 out of Duke University and spent a couple years evaluating property deals, before leaving for a spot at the Stanford University Graduate School of Business.
It was after attending Stanford, which has trained generations of entrepreneurs and tech investors, that Gross began investing in TMT for Goldman. He has brought that tech focus to the division more broadly, leading MBD’s portfolio-wide valuation creation efforts, according to an official biography.
Gross is a member of the Global Equity Leadership Group, and runs corporate equity across both the Americas and Europe. He was named a partner in 2012.
Gross currently serves on the boards of portfolio companies Neovia Logistics Holdings, Proquest Holdings, MDC Partners, Inc., Trader Interactive Holdings and Slickdeals, LLC.
Tom Connolly, global co-head of credit
Connolly is the long-time leader of Goldman’s private credit business.
Like others, he brings a leveraged finance background to the role, having led Goldman’s investment banking efforts in leveraged finance before joining MBD in 2008. It was then that Connolly started a direct-lending platform that pioneered a surge in interest from other private-equity shops.
A mezzanine fund started in 1996 was merged into the platform, and by 2018, under Connolly, the business had grown to become one of the biggest in the world by assets under management.
It now employs more than 170 investment professionals worldwide, according to a presentation Meketa Investment Group made to the Connecticut state treasurer in support of the state’s $350 million investment.
Connolly is now the co-chief investment officer of West Street Strategic Solutions, the fund Goldman is raising to invest in distressed and special situations.
Originally slated for between $5 billion and $10 billion, the upsizing of the fund is in some measure a vote of confidence for Connolly and his fellow co-CIO, Greg Olafson. It’s targeting gross returns of between 15% and 18%, according to the Connecticut presentation.
A Union College graduate, Connolly joined Goldman in 1996. He made partner in 2004.
He serves on Union College’s board of trustees, and on the national advisory board of Jumpstart Inc, which works with underprivileged preschoolers to promote literacy and reading skills, according to an official biography.
Greg Olafson, global co-head of credit
Alongside Connolly, Olafson runs Goldman’s credit investing business and serves as the co-CIO of the Strategic Solutions fund.
Thirteen managing directors and 31 vice presidents round out the investment team for the high-profile fund, according to the Connecticut presentation.
Olafson traces his roots to the special situations group, and he ran the European SSG group for six years before joining the merged MBD last year, according to an official Goldman biography. He joined the bank in the investment banking division in 2001, moved to the distressed debt trading team two years later, and was a founding member, with Salisbury, Millman and Nishi Somaiya, of the Europe SSG team in 2003. He was named partner in 2012.
A citizen of Canada, Olafson graduated from the University of Windsor. He obtained his MBA from the University of Virginia’s Darden School of Business, where he was a Shermet scholar. He’s a member of Goldman’s firmwide risk committee.
Alan Kava, co-head of real estate in the Americas
Kava brings a background in law to his role as one of Goldman’s most senior real-estate investment professionals.
A corporate and real-estate lawyer at Simpson, Thacher & Bartlett before joining Goldman in 1997, he rose to become a managing director in 2002 and a partner in 2008. That capped a four-year stint serving as CFO of the real-estate business.
In his current role, the University of Virginia grad and holder of a JD from New York University is responsible for designing and executing the firm’s property-investment strategy throughout the Americas. He sits on the MBD real-estate investment committee and the urban investment group investment committee, among others.
Gaurav Seth, co-head of real estate in the Americas
Seth runs the Americas real-estate investing practice alongside Kava, and like others on the list, counts many years in the special situations group in his Goldman career.
He sits on the MBD real-estate investment committee and the urban investment group investment committee, in addition to the investment committees for credit and the specialty lending group, which makes loans of between $20 million and $150 million to middle-market companies.
Seth joined Goldman in 1998 after graduating with computer science and economics degrees from Swarthmore College. He made partner in 2012.
Tavis Cannell, co-head of real estate in Europe
Cannell joined Goldman mid-career, setting himself apart from many of his colleagues on the MBD leadership team.
He joined Goldman’s European special situations group in 2005 from Morgan Stanley, where he’d worked in mergers and acquisitions banking, and real-estate private equity in London and Paris. He made partner in 2014.
As one of the people responsible for Goldman’s real estate investing activities in Europe, Cannell invests in real-estate assets, as well as operating platforms and real-estate-backed loans, according to his official biography.
The Wharton School of the University of Pennsylvania grad also has an MBA from Columbia University.
Philippe Camu, global co-head of infrastructure
Camu has been a senior member of Goldman’s infrastructure investing team since its formation in 2006, running the business in Europe for much of that time.
A 1992 graduate of HEC Paris, Camu joined Goldman out of college and worked for five years in the corporate finance department.
In 1997, he joined PIA, initially focused on real estate. Years later, he ran the group’s Whitehall Fund investments in northern Europe, as well as a business focused on Italian non-performing loans, according to his official biography.
Named partner in 2010, he is a member of the infrastructure investment committee. He serves on the board of CityFibre, a UK-based telecom provider, and HES International, which runs ports around Europe.
Scott Lebovitz, global co-head of infrastructure
Lebovitz shares oversight of the infrastructure investing business with Camu, and he’s also a member of the Global Equity Leadership Group.
Lebovitz joined Goldman in 1997 straight out of the University of Virginia and spent his first two years, like many in the merchant banking division, cutting his teeth in investment banking. In 1999, he moved to MBD and never looked back.
A managing director in 2007, Lebovitz made partner five years later.
Nishi Somaiya, global co-head of growth equity
The London-based Somaiya is one of three co-heads for the growth equity investing business, joining Hui and Darren Cohen to lead a unit focused on investing in companies that boast high growth rates.
Prior to joining the merchant banking division last year, the University of Oxford graduate had run the European special situations group’s private-capital business since 2014. The group focused on middle-market lending and growth equity. Somaiya now serves on the investment committees for both MBD growth and the specialty lending group.
She joined Goldman in 2001 from Oxford as an analyst on the leveraged finance team. She moved into distressed debt trading the following year and then was a founding member of the European special situations group.
Somaiya, who serves on Goldman’s partnership committee, made Goldman’s highest rank in 2016. She’s on the board of the Royal Ballet School.
Darren Cohen, global co-head of growth equity
Cohen is a familiar name in Silicon Valley and wherever financial technology startups are plying their trade.
As the longtime head of an internal investment team in Goldman’s securities division known as Principal Strategic Investments, Cohen has been responsible for leading or overseeing some of Goldman’s most successful fintech investments.
As co-head of the growth equity business, he focuses on minority investments in high growth companies and continues to oversee the legacy PSI stakes, according to an official biography.
Cohen, for example, works closely with Symphony, the messaging service that’s trying to displace the Bloomberg Terminal’s chat function and Slack for enterprise clients.
He’s also on the board of Crux Informatics, a startup aiming to help firms digest and process huge amounts of data. And he played a leading role in Goldman’s investment in financial-data provider Markit, according to Pitchbook.
The Emory University grad joined Goldman in 2000 as a research analyst in London, covering software and other tech companies until his exit in 2004. He rejoined three years later and was named partner in 2014.