The departure of Yusuf Alireza from Goldman Sachs, leaving David Ryan as the sole head of the region, may be another sign that even bankers in trading don’t see light at the end of the tunnel in 2011 and are looking elsewhere for new opportunities.
Alireza, who was among four Asia-based members of the firm’s global management committee, joined Goldman Sachs in 1992 in fixed income research in New York and made partner in 2004. He moved to Hong Kong in 2008 to run the securities division in Asia, which is responsible for sales, trading and investments in fixed income and equity products, currencies, commodities and derivatives, as well as market-making in equities and options. This is also the part of the bank that is responsible for proprietary positions in these products, which had been a big money-maker before the financial crisis. He was promoted to co-head of Asia-Pacific ex-Japan in January this year, which is when he also earned the global management committee seat, indicating that the firm clearly still had faith in him. Alireza oversaw trading operations and Ryan focusing on advisory services.
A spokesman for Goldman Sachs said the firm was surprised by his internal announcement a few weeks back that he planned to leave. Goldman is looking to replace Alireza but it is unclear at this stage if it will re-instate a co-head presidency.
That decision obviously depends on who Goldman selects to replace Alireza, but could also signal where the bank is placing its bets for the future. Alireza was a big earner for the firm, a point we highlighted when we included him in our November 2009 cover story, The Club, in which we listed the region’s top 50 “masters of finance”.
But this year Goldman reported a $428 million loss for the third quarter of 2011, compared with a $1.7 billion profit a year earlier. That was only the bank’s second quarterly loss since it went public in 1999 (the other was at the end of 2008, during the height of the financial crisis).
A key part of this past quarter’s loss was that investors have been worried about catfights in Washington, global protests about Wall Street’s actions and Europe’s sovereign debt woes. Throw in regulatory uncertainty and there is a new reality for financial firms: it’s just not that easy to record pre-crisis earnings. And that will be reflected in bankers’ pay.
“Look, if he turns up at another bank, it will show discontent at Goldman, which happens anywhere,” said an equally powerful rival banker. “But if he shows up running a corporation, I think that’s a more interesting sign. It shows even bankers are wondering if it’s time to get out [of the industry]. The good ones will find new opportunities”.
He was referring to rumours that Alireza will resurface in the region as a corporate CEO. Noble Group is the most frequently mentioned since the announcement that CEO Ricardo Leiman was stepping down. Alireza could not be reached for comment.