Goldman Sachs appoints directors

Goldman Sachs, the US investment bank, has appointed 160 new managing directors. They will be eligible for the firm's highly prized partnerships, to be handed out at the end of October.

The move comes as the firm seeks to retain staff who may have been disappointed by its withdrawal on Monday of its initial public offering (IPO), because of market conditions.

Goldman was due to abandon 130 years of partnership and turn itself into a publicly traded company by launching an IPO of 1015 per cent of its stock in late October or November. Initial estimates valued the firm at up to $30 billion but the halving of the stock prices of publicly traded rivals in the last two months has drastically cut that valuation.

Goldman has 402 managing directors, of whom 189 are partners. The first non-partner managing directors, known as extended managing directors, were created in 1996, as part of a plan to "broaden and deepen the leadership of the firm as it became more global", an official said.

The firm is expected to appoint at least 40 new partners. New partners stand to be allocated more shares in any flotation as a result of their elevation.

Goldman said it plans to revive the flotation plan when conditions improve. "This organisation is emotionally and intellectually committed to the strategic goals outlined at the time of our decision to become a public company," said Mr Henry Paulson, co-chairman and chief executive officer of the firm, on Monday.

Competitors said yesterday the withdrawal of the IPO is embarrassing for the firm, and rivals will seek to capitalise on it. Goldman, a leading underwriter of IPOs, arranged one of the few recent successful offerings - for e-Bay, the Internet company.

Goldman executives said they would not advise other financial institutions to launch IPOs in current market conditions.