“I may be the longest serving individual at Goldman Sachs who was a partner,” he says.
Life at Goldman began for Dobkin in 1967, when he started in the firm’s Philadelphia office. Most of his first 10 years was spent in or around equity sales, before he ended up running the institutional equity business for the whole mid-west region.
For another five years after that he came to New York and was in a series of roles – “odd jobs”, as Dobkin calls them – executing transactions that sought to take advantage of changes in market thinking, particularly around the ways in which Wall Street firms could interact with the kinds of investors that were starting to rise in importance, like pension funds and mutuals.
His legacy would be defined, however, by his work in the mid 1980s, when he and his colleagues created many of the elements of what people now consider to be the modern equity capital markets business. This revolution came about because Goldman, despite its number one position in equity block trading and having the best equity sales team, was in a lowly 11th place in equity underwriting league tables.
“Our head of investment banking came to me and said: ‘What’s wrong with this picture? Go fix it.’”
So Dobkin set about improving the firm’s reach with institutional investors and recasting the way in which corporations sold and raised equity capital with those investors in mind. The ultimate result was the modern notion of marketing an equity story not just to existing holders of a company’s stock but to all potential investors. Most importantly, this meant engaging with the emerging body of institutional investors to whom retail were entrusting their cash.
Not for nothing is he now known as ‘the father of the IPO’. The innovations attributable in some way to his work are legion: bookbuilding, shelf registrations and the concept of the securities firm as intermediary between an institutional investor and the corporation seeking capital.
And he transported, via Goldman, all this thinking to markets outside the US, principally to Europe in the late 1980s in time to influence the surge of privatization activity that would dominate equity capital markets for the next decade.
With such a long career, picking deals might seem invidious. But for Dobkin it is the privatizations that stand out and in particular his work on deals for the UK government.
“For the first time there was the opportunity to coordinate on a global basis a single offering of shares at a single price in many markets – and in huge size,” he says.
Dobkin didn’t work on the first of those – the IPO of British Telecom in November 1984 – but his firm was involved in many subsequent ones, beginning with British Gas in 1986 and including all of the electricity sector deals.
Has anything changed much since the upheaval of that time? Not really, he argues.
“It’s not surprising at all that there has been relatively little change in the way deals have been done since then, since it was absolutely the natural way for buyers and sellers to be matched up.”
One change was forced by regulators, however. The Global Analyst Research Settlement of 2003, driven by New York attorney general Eliot Spitzer, was a seismic event for equity capital markets offerings, seeking as it did to tackle the way in which investment bankers might seek to influence the views of their own firms’ research analysts.
The settlement resulted in the installation of Chinese walls between the two departments at investment banks.
For Dobkin the settlement raised questions about the restriction of the free flow of information in the market, although he agrees that action was needed.
“There were some abuses, no question, and the regulators were right to tighten things up, but I think one can debate whether it went too far,” he says.
Perhaps unsurprisingly, Dobkin doesn’t like to identify a single mentor.
“I was lucky over the years to have a whole series of people that gave me counsel or advice,” he says.
Nevertheless, he identifies two of the most influential in his career: Richard Menschel, who hired him, and Robert Mnuchin, who managed equity trading and risk at the time. They served at the firm for 25 and 33 years, respectively.