Goldman Sachs traders are leaving, and they’re... Making drinks
Goldman Sachs is cutting Managing Directors (MDs), and has been for a while. Sometimes those MDs show up at other banks. Sometimes they retire. Sometimes… Well, sometimes those MDs say “to hell” with banks, and they strike it out on their own. And that’s what some of Goldman’s top traders seem to be doing - although it's not clear whether they've simply left of their own accords to do this.
Niklas Rasmussen is one of the traders trying something new. Rasmussen was with Goldman in London for seven and a half years, most recently as an MD with the cash equity trading team. He joined from Jefferies, where he spent two years. Rasmussen founded GLTea-1 in London last month, as its sole director and shareholder – curiously, the nature of the business is listed as “Manufacture of soft drinks”.
Akshay Sahni is another. Sahni was with Goldman Sachs in Hong Kong for over 14 years, becoming an MD for the bank in 2013. He joined Goldman after 3 years with Citigroup, where he was a director in the equity derivatives trading team. Sahni, now describes himself as a self-employed proprietary trader, although he’s not registered with any firm on the Hong Kong Securities and Futures Commission.
There are certain benefits to a bank trader going solo. Banks pay around 5% of profit generated as a bonus, which is less than a hedge fund (anywhere up to 30%, in extreme cases). Solo traders can earn up to 100% (after tax), although there are obviously losses to eat.
As for Rasmussen, the global beverage industry is worth around $190bn, significantly more than the world’s investment banking wallet. Maybe he’s on to something there.
It’s worth noting that there is no indication that either Rasmussen or Sahni were fired from Goldman Sachs.
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