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Investment banks suffering from falling sales and trading revenues are turning to Silicon Valley to boost income. None more so than Goldman Sachs, reports the Financial Times. (paywall)
“The bank has climbed back up the league tables for tech IPOs, according to Dealogic, and was recently appointed lead underwriter on the IPO of Square, the payments company. So far this year Goldman ranks second among tech underwriters behind Morgan Stanley, and is a clear number one in M&A,” writes the FT.
But, there are risks.
“If one individual does much of the legwork, banks make themselves vulnerable if that person leaves. That was the case at Goldman when Anthony Noto [one of the three leaders of the bank’s tech, media and telecommunications division] left last year and joined Twitter, via a short spell at a hedge fund."
In addition, “cosying up to young start-ups with unpaid work and other favours can also create 'awkward situations', notes another rival banker, if there is no obvious reward at the end of it.”
Photo: Patrick Nouhailler