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Goldman forms new equities team to improve hedge fund services
[NEW YORK] Goldman Sachs Group Inc has created a new team to encourage collaboration between its businesses that service hedge funds, and trade swaps and other derivatives.
Puneet Malhi and Cyril Goddeeris will be co-heads of the group, known internally as the global funding and inventory management team, Goldman Sachs said in a staff memo obtained Tuesday by Bloomberg.
The departure of William Conley as global head of securities lending, and Kevin Kelly's appointment as his replacement, helped prompt the change, according to a person with knowledge of the matter.
The unit formalises what had been a joint venture, with the hope that better teamwork will make it easier to offer competitive pricing on products and loans that prime-brokerage clients want, said the person, who asked not to be identified talking about private deliberations.
Tiffany Galvin, a spokeswoman for the New York-based bank, declined to comment on the March 23 memo.
Goldman Sachs is seeking to more efficiently use its balance sheet and stay competitive as new rules make capital more expensive.
Improved communication should allow for a better understanding of the firm's total risk, allowing it to offer improved pricing if the clients' trades help lower its exposure, the person said.
By one measure, Goldman Sachs has lost share in prime brokerage, with JPMorgan Chase & Co leapfrogging into second place in Coalition Ltd's 2016 ranking, behind leader Morgan Stanley.
Goldman booked US$14.5 billion in revenue from institutional client services last year, down five per cent from 2015, fuelled by a 12 per cent decline in revenue from its equities business.