BL: Goldman Sachs’s Spilker, Overseer of $871 Billion, Exits Firm
By Christine Harper and Bradley Keoun
Feb. 13 (Bloomberg) -- Goldman Sachs Group Inc. investment management co-head Marc Spilker is leaving the firm after two decades and will be replaced by a predecessor.
Spilker, 45, will turn over responsibilities at the end of February to Edward Forst, who rejoined the most profitable securities firm in Wall Street history in September from Harvard University, according to internal memorandums yesterday from Chief Executive Officer Lloyd Blankfein and President Gary Cohn.
The departing executive was on the firm’s management committee, whose members got year-end bonuses for 2009 in stock they can’t sell for five years instead of cash.
Spilker’s exit is the latest of a series of changes atop investment management, which accounts for less than 10 percent of the firm’s revenue. Spilker and Tim O’Neill were elevated to help run it in June 2008, when Forst, 49, left to oversee finances at Harvard, his alma mater, after less than a year at the division.
“There’s a history there of no one really running asset management for a long period of time,” said Henry Higdon, managing partner at recruitment firm Higdon Partners LLC in New York. “Have any of the leaders of the firm ever come from asset management? I don’t think so. They’re all from trading or investment banking.”
Winkelried’s Departure
Spilker’s departure comes less than six weeks after Goldman Sachs added Steven H. Strongin, global head of investment research, to the management committee. Including both Spilker and Strongin, there are 31 members of the committee. Goldman Sachs last lost a member of the committee on March 31, when Jon Winkelried, who had been co-president with Cohn, left after 27 years.
Investment management, which manages funds for institutions and wealthy individuals, is a smaller department at Goldman Sachs than investment banking and trading. The division’s 2009 revenue of $3.97 billion was about 8.8 percent of the firm’s revenue and was down 13 percent from 2008 as both management fees and incentive fees declined.
Three months before Forst left for Harvard, division co- head Peter Kraus departed after almost 22 years at the firm, later surfacing at Merrill Lynch & Co. to work with former Goldman Sachs colleague John Thain. Eric Schwartz, a previous co-head of the division, left Goldman Sachs in 2007 after 23 years.
Spilker, who earned an undergraduate degree from the University of Pennsylvania and a master’s degree in business from the university’s Wharton School, joined Goldman Sachs in 1990 and became a partner in 1996. Before joining the investment management division in 2006 as head of global alternative asset management, Spilker was responsible for U.S. equities trading and global equity derivatives. He previously ran fixed-income, currencies, and commodities in Japan and served as global head of foreign exchange options.
Hedgerow, Hedge Fund
Spilker will become a “senior director” of the firm, according to the memo. Senior directors serve in an advisory capacity and aren’t employees.
“Marc has made outstanding contributions throughout the firm and has mentored many colleagues who have developed into our important leaders,” Blankfein and Cohn said in the memo. Andrea Raphael, a spokeswoman, confirmed the memo’s contents.
Spilker made news in 2007 after a dispute with James Chanos, founder of New York-based hedge fund manager Kynikos Associates Ltd., over the location of a hedgerow on Chanos’s oceanfront estate in East Hampton. Spilker said the vegetation made a common path to the beach almost impassable and hired a contractor to move the shrubs. They stopped working after Chanos called the police.
Simmons
Separately, Goldman Sachs said yesterday that Ruth Simmons will leave the board of board of directors after 10 years because of “increasing time requirements” in her role as Brown University President.
Earlier this month, Brown University’s student newspaper, the Brown Daily Herald, published an interview with Simmons in which she discussed her role on Goldman Sachs’s board and the criticism the firm has received for paying billions of dollars in bonuses even after receiving taxpayer support in 2008. The firm’s $16.2 billion expense for compensation and benefits this year was enough to pay each employee $498,246. Simmons is on the firm’s compensation committee.
To contact the reporters on this story: Christine Harper in New York at charper@bloomberg.net; Bradley Keoun in New York at bkeoun@bloomberg.net.
Last Updated: February 13, 2010 00:00 EST
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