Goldman Sachs appoints new co-head of securities division

Goldman Sachs has appointed veteran fixed-income executive James Esposito as co-head of its securities division, in the first leadership change since David Solomon was unveiled as chief executive designate last month.

A person familiar with the situation said the appointment would likely be announced on Monday morning in the US. The move is designed to bolster leadership of the bank's securities business after a number of exits. The news had been reported earlier on Sunday by the Wall Street Journal.

Mr Esposito is at present co-chief operating officer of Goldman’s fixed-income, currencies and commodities division – a vital business within the bank that has struggled in recent years but posted a strong rebound in the first half of 2018 as market conditions improved.

The fixed-income division has also benefited from Goldman’s efforts to diversify away from its traditional hedge fund and institutional clients into the wider corporate sector. Mr Esposito has focused on expanding the bank’s reach across its client base, looking to do more business with a wider pool of clients.

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Corporate assets

The bank has also boosted its lending activity and part of the strategy will be to expand the securities business to more trading of corporate assets, according to the person.

Mr Esposito will run the trading division alongside Ashok Varadhan, a former star trader who became a partner at 29 years of age. He had been co-head of the securities division with Pablo Salame and Isabelle Ealet until they both left the bank in June. Harvey Schwartz also left the bank earlier this year after losing a year-long power struggle with Mr Solomon to succeed chief executive Lloyd Blankfein.

Mr Esposito’s background stands in contrast to the typical traders such as Mr Varadhan that assume the role, having started out at Goldman selling emerging-market debt that the bank underwrote for clients.

He is based in London and has been at the bank since 1995. Mr Esposito will be the second co-head based in London, with Marc Nachmann, co-head for the investment banking division.

Mr Solomon does not take over as chief executive until the end of September. It will mark the end of the 12-year leadership of Mr Blankfein, who had steered the bank through the financial crisis but came under increasing pressure as its fixed-income business has underperformed its peers.

Insiders say Mr Solomon is unlikely to make significant leadership or strategic changes, with Goldman having already promised improvements for its trading division. – Copyright The Financial Times Limited 2018