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Goldman loses its `Queen of Commodities' marking end of an era

Isabelle Ealet, the departing co-head of the securities unit at Goldman Sachs Group Inc., is the last of a generation of bankers who battled for supremacy in a golden era of commodity profits for Wall Street.

 [LONDON] Isabelle Ealet, the departing co-head of the securities unit at Goldman Sachs Group Inc., is the last of a generation of bankers who battled for supremacy in a golden era of commodity profits for Wall Street.

Goldman announced Monday that French-born Ealet, 55, will leave the bank next month as part of larger reshuffle.

For years, Ealet was the queen of commodities on Wall Street, running a division in Goldman that regularly made more than US$3 billion in net revenue annually. Although she hasn’t overseen the commodities business on a day-to-day basis since she was promoted to co-head of securities in 2012, she remained closely associated with the unit, which last year suffered its worst performance since the bank’s initial public offering two decades ago.

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Ealet was part of a group of bankers -- bitter rivals during the trading day, who nonetheless socialized together in the evenings -- who rose to prominence in the late 1990s and early 2000s and built mighty natural resources businesses in Wall Street and the City of London. Also in the club are Colin Bryce, the former co-head of commodities at Morgan Stanley; Benoit de Vitry, who established Barclays Plc in the sector, and Danny Masters, who did the same for JPMorgan Chase & Co.

After a five-year lean period for commodities in which banks have been under pressure from heightened regulations and tough trading conditions, Ealet was the last of the group to remain at the bank where she made her name. She didn’t respond to a voicemail message Monday seeking comment.

“Over the past couple years, Isabelle has been very focused on building a strong team to succeed her and is leaving now that the next generation is in place,” Michael DuVally, a spokesman for Goldman, said in an emailed statement.

Ealet’s departure also marks the loss of the firm’s most senior female executive in a revenue-producing role. She is one of only four women on the bank’s 30-person management committee. Goldman now has three co-heads of commodities -- Ed Emerson, Jeremy Taylor and Jacques Gabillon.

Her departure follows a dire 2017 for Goldman’s commodities business, when it was overtaken by old rival Morgan Stanley. Still, she is not leaving at the lowest moment: the bank highlighted "improved performance" at the commodities unit in the first quarter as it reported the best results for its fixed-income, currencies and commodities business in three years.

Ealet became global head of commodities at Goldman in 2007, running the division during five years that turned out to be golden. The bank’s commodities revenue rose from less than US$500 million a year before 2000, to average over US$3 billion a year between 2006 and 2009, and hit a record high of US$3.4 billion in 2009, according to a U.S. Senate report on banks’ involvement in commodity markets.

Commodities was a money-maker, with Goldman generating an average margin of 60 per cent, according to an internal presentation disclosed in the same U.S. Senate report.

Remaining Engaged

Even when she was promoted in the securities unit, responsible for everything from equity to currencies, Ealet remained deeply engaged in the business where she had begun her career, often asking executives detailed questions about the performance of the commodities unit, according to people familiar with the conversations, who asked not to be named discussing internal matters.

Though her childhood dream was to be a pilot in the army, she was attracted to the world of commodities because she wanted to travel. After graduating in 1986 from the Ecole Supérieure de Commerce de Marseille and the Paris Institute of Political Studies, she joined a predecessor of French oil giant Total SA, buying products for the company’s refineries. She joined Goldman Sachs in 1991 as an oil products trader and was named a partner in 2000 at the age of 37.

Seven years later, she climbed further, taking control of the whole commodities division, at the time employing more than 250 bankers and traders and earning the nickname the “queen of commodities.”

Ealet changed the focus of Goldman’s commodities business, concentrating on derivatives markets. That was a contrast from the strong physical bent of the division during the earlier days of J. Aron & Co., the commodities merchant that Goldman bought in 1981, and under oil traders Stephen Hendel and Stephen Semlitz in the 1990s, when the bank even owned refineries. Lloyd Blankfein, the bank’s chief executive officer, started his career at J. Aron.

Ealet hated publicity. In a rare interview, she explained to the French magazine L’Expansion what she liked about her experience in banking: "What I appreciate most is the culture of results. At Goldman Sachs, you are judged on your performance, not on your relationships or diplomas.”