Unstructured Finance

How Babel became Symphony

The communications platform announced this week went through several different names before Symphony.

The idea for a communications platform went through several names before Symphony.

In late-2012, Goldman Sachs traders started to notice something unusual. News was sometimes breaking on social media faster than it was breaking on sophisticated information terminals that cost the bank millions of dollars each year.

The realization set in motion a series of events that would lead Goldman to team up with 13 other financial firms and invest in a new communications platform called Symphony. But before it was called Symphony, it had a lot of other names. What follows is the story of how Symphony got its name, as told to Unstructured Finance by people involved with the project.

A group of engineers at Goldman called “strats,” who work closely with the trading division on technology issues, set about finding a way to get relevant social media content in front of traders in real-time. They launched an internal platform called LiveCurrent in 2013 that combined elements of messaging, social media, research and other information in one central place. Because it was developed internally, the platform could be used by all employees across front, middle and back-office functions without significant additional cost. That made communicating about active trades much quicker and easier for all the staff involved.

As Goldman’s trading desk was grappling with this issue internally, its principal strategic investments team began picking up on the same theme of fragmented communication across Wall Street. That group, co-headed by Darren Cohen, makes investments with the bank’s own capital in the financial-services industry. It began looking for startups that had a solution to the problem. Cohen’s team code-named the project ”Babel” because they saw their task as simplifying a wide-ranging set of communications systems that were speaking in different tongues.

Goldman fund haggles with REIT investors over 10-cent printing fee

A Goldman fund’s REIT charges investors 10 cents per page for financial statements.

Of all the accusations made by an aggrieved group of REIT investors against Goldman Sachs, perhaps the most surprising is how stingy the bank can be.

A Goldman fund that manages the REIT, formerly known as Equity Inns Inc, requires investors to pay 10 cents per page for print copies of its financial reports. Those reports are not available online, nor are they released publicly — a fact that has led this long-running feud to spill into public view in comment letters to the SEC.

NJ Governor Chris Christie spotted outside Goldman Sachs

New Jersey Governor Chris Christie shakes hands with Lloyd Blankfein lookalike outside Goldman Sachs on Wednesday

Editor’s note: Updated with reason for Christie’s visit.

These days it seems New Jersey Governor Chris Christie is everywhere, from TV talk shows and radio appearances to accompanying Prince Harry on a well-publicized tour of the devastated Jersey Shore. So maybe it’s not too surprising he was spotted outside of Goldman Sachs’s Lower Manhattan office Wednesday morning. An Unstructured Finance reporter happened to see the sharp-tongued Republican governor walking into 200 West Street just before 11:30. Spokespeople for Goldman and the governor’s office said he was there for the bank’s Global Macro conference, which invites politicians, regulators, diplomats, CEOs and other power players to talk about big-picture trends.

Christie, who filed papers last year to run for re-election in 2014, recently announced that he had gastric bypass surgery to deal with his weight problem and he was looking in good spirits on Wednesday. He had a thick security detail and shook hands with a guy who, from behind, looked like Lloyd Blankfein but turned out not to be. He buttoned his jacket and waved to onlookers on his way into 200 West Street.

Wall Street’s trading businesses turn to survival of the least dead

Darwin theorized that peacocks’ colorful plumage was a sign of        their evolutionary strength.

Wall Street has always been known as a cutthroat kind of place, but lately it seems big investment banks are just mulling around, hoping their competitors die first.

A report on Friday by Goldman Sachs bank analysts said that the industry has entered what they called a state of “reverse Darwinism,” in which banks are betting their long-suffering trading operations can increase revenue not by stealing business from rivals on a competitive basis, but by waiting for rivals to call it quits – leaving their clients with no choice but to move business elsewhere.

Goldman, AIG and the government renew their friendship

Scanning Goldman Sachs’s newly published interactive annual report on Monday, Unstructured Finance had to do a double-take upon seeing American International Group highlighted as a client success story.

Yes, that’s right. AIG.

Goldman’s site features a 3-minute, 47-second video with two investment bankers, Devanshu Dhyani and Andrea Vittorelli, talking about their work on various AIG deals to help repay the U.S. government.

It also has photos of bankers around the globe who were involved with AIG stock sales, stock buybacks and assets sales, including Chris Cole, co-chairman of investment banking; Yan Liu, Ed Byun Dan Dees and Phyllis Luk, bankers based in Hong Kong; and Michael Tesser and Terence Lim, bankers based in New York.

Once-obese Goldman analyst becomes fitness evangelical, gym CEO

Wall Street is shrinking, but so are some of its bankers.

Eight years ago, Goldman Sachs Group’s Kishan Shah weighed 400 pounds and couldn’t find a suit that fit his 62” waist for a job interview. Now he’s 195 pounds, and he’s quitting Goldman to spread the gospel of healthy weight loss as chief executive of a chain of gyms for obese Americans.

“I made a vow that day to focus on diet and exercise, and I lost over 200 pounds – no surgeries, no fad diets, no trainers,” Shah said in a video chat this month with First Lady Michelle Obama.

Shah, who is 26 and works as an analyst in the Special Situations Group at Goldman Sachs, may not be representative of the typical bank employee who’s leaving.

The dollars keep rolling in for foreclosed home funds

By Matthew Goldstein

Today, The Wall Street Journal reports that foreign investors have caught the gold rush mentality that surrounds the market for foreclosed homes in the U.S. But domestic-based firms are still doing quite well themselves in raising big dollars to buy-up foreclosed homes with an eye to renting them out before eventually selling them.

A foreclosed home fund managed by Tom Barrack’s Colony Capital recently disclosed in a regulatory filing that it had raised $536.7 million from 54 “accredited” investors. The fund relied on JPMorgan Chase’s wealth management team to do some of the selling.

Colony, along with private equity giant Blackstone Group and Malibu, Calif. based American Homes 4 Rent, have emerged as the three biggest buyers of foreclosed homes over the past year. Blackstone has spent well over $1 billion on buying up roughly 16,000 homes, and American Homes, backed by $600 million from the Alaska Permanent Fund, isn’t far behind.

Is Blankfein’s beard really just a beard?

Goldman Sachs Chief Executive Lloyd Blankfein has been sporting a beard lately, which has some people asking: is he on his way out?

The 58-year-old former commodities salesman shaved his beard, lost 50 pounds and quit smoking as he prepared to take over the reins of Goldman Sachs in 2006. He also “started dressing more like a banker and less like a renegade,” according to William Cohan, a former investment banker who wrote a book about Goldman Sachs.

Although Blankfein hasn’t been seen sporting motorcycle jackets or packing on the pounds yet, he surprised crowds at the World Economic Forum in Davos, Switzerland, last month with more than a five o’clock shadow. And on Tuesday he appeared on CNBC again with an even fuller beard.

Goldman: 1, Volcker: 0

By Lauren Tara LaCapra

There’s an interesting article out today from Bloomberg, which accuses Goldman Sachs of skirting the yet-to-be-defined-or-implemented Volcker rule, and accuses its top executives, including CEO, Lloyd Blankfein, of being a hypocrite.

Bloomberg reporter Max Abelson has done some good work on the subject. His article is well written and well sourced—he spoke to at least 20 people and got many of them to go on the record about their former employer and describe how Goldman continues to place bets with the firm’s own money.

Abelson concludes “Goldman Sachs has worked around regulations curbing proprietary bets at banks. “ But what the article really points out is that Wall Street will keep finding new ways to move the goal posts in its favor when it comes to defining and clamping down on prop trading.

Greg Smith says Goldman’s response confirms his criticisms: Q&A

Greg Smith, the ex-Goldman Sachs salesman who stunned the investment bank with a scathing public resignation in March, is now on the defense.

Smith, whose book, “Why I Left Goldman Sachs” hits bookstores today, has been facing the wrath of Goldman, media critics, and online commenters since last week, when bits and pieces of his book began to leak out and Goldman quickly jumped at the chance to characterize him as an undistinguished ex-employee with an ax to grind.

Goldman said Smith quit because he didn’t get the raise or position he wanted. It has also tried to cast doubt on the veracity of his claims by making other current and ex-Goldman employees available for media interviews to dispute Smith’s characterization of events in his book anecdotes.

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