Goldman takes a beating, but is still the one to beat
Competitors gloating over the firm’s current predicament are likely to be sorely disappointed.
For a firm that, even at the best of times, detests publicity Goldman Sachs must be apoplectic at the moment. No firm likes to be embarrassed in front of its clients, neither does it expect its private conversations with those clients to be made public.
The accusation that Goldman was, in one breath, discussing how to defend UK airports operator BAA from a hostile takeover, and in the next offering to put together a ‘white knight’ takeover involving its own private equity fund, seems aggressive even by Goldman’s notoriously ferocious standards when it comes to securing fees.
The so-called ‘spank from Hank’, the voicemail sent to senior managers by CEO Henry Paulson supposedly warning about the threat to Goldman’s reputation of the potential conflict of interest between its clients’ money, and its own, has Goldman’s lesser competitors laughing at its predicament, and predicting the end of the Goldman era.
Talk about wishful thinking. First, the reason for all the publicity is that Goldman was, and remains, the superpower of the M&A business. As an investment banker, a Goldman business card gets you in every door. No other firm has that ability, and it’s not about to change.