Outlook: Goldman Sachs

JON CORZINE, co-chairman of Goldman Sachs, has plainly lost the battle, but has he also lost the war? Mr Corzine has spent several years attempting to persuade his fellow partners that the future for the world's best known investment bank lay as a publicly-quoted company rather than an old-style partnership. Eventually a convincing majority agreed with him, but they did so too late to make it happen. By the time they'd made up their minds to sell, nobody wanted to buy.

As always in such circumstances, it proved difficult for senior partners to admit this. As it happens, Goldman Sachs is less up its own whatsit than many of its peers in investment banking; its people are as savvy and switched on a breed as it is possible to find. But even so, they are not used to failure and the realisation that they had their timing so badly wrong has been a humiliating one.

None of this means that Goldman Sachs is flawed in its strategy of flotation, or that the plan is now buried for good. Indeed, if Goldman Sachs is going to prosper, grow and consolidate its position in the next upturn, it has to float. As for the present business cycle, Goldman Sachs has obviously missed its chance, but bad though things now look, this is not the end of capitalism, or global capital markets.

The immediate outlook is rocky, but ultimately the experience will prove a cathartic one. Capital markets will emerge strengthened and rejuvenated, and when they do, the opportunities for investment banks - in terms of reorganising global industries, savings, international trade and restructuring emerging economies - will be as rich and varied as ever. The most forward- looking businesses are already looking beyond the present malaise to a time when they can meet that challenge. If Goldman Sachs is going to be up there with Merrill Lynch, Morgan Stanley and Travellers, as it presently is, it's going to have to float.

Access to capital is part of the reason, although it is obviously the case that you don't necessarily need your shares to be quoted to obtain capital on favourable terms. Transparancy is another. Part of the process of rebirth for capital markets is going to be much greater disclosure. In such a world, an old fashioned and secretive partnership is going to look out of place and out of date.

But most important of all, human nature requires value recognition and the only mechanism we have for assessing it is the market. Most active and sleeping partners at Goldman Sachs want a value put on their stakes, and non partners want a share of the spoils to bind them in. Again, flotation is the only way to achieve this.

The IPO is on the back burner for the time being, but it is a racing certainty that in three to four years' time, Goldman Sachs will indeed be a publicly quoted company.

News
peoplePaper attempts to defend itself
Voices
voicesWe desperately need men to be feminists too
Life and Style
food + drink
Arts and Entertainment
British actor Idris Elba is also a DJ and rapper who played Ibiza last summer
film
PROMOTED VIDEO
News
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

IT Project manager - Web E-commerce

£65000 Per Annum Benefits + bonus: Clearwater People Solutions Ltd: If you are...

Trainee / Experienced Recruitment Consultants

£20000 - £25000 per annum + OTE £40,000: SThree: SThree are a global FTSE 250 ...

Trainee Recruitment Consultant - Soho

£20000 - £25000 per annum + OTE £40000: SThree: As a Recruitment Consultant, y...

Trainee Recruitment Consultants - Banking & Finance

£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

Day In a Page

Secret politics of the weekly shop

The politics of the weekly shop

New app reveals political leanings of food companies
Beam me up, Scottie!

Beam me up, Scottie!

Celebrity Trekkies from Alex Salmond to Barack Obama
Beware Wet Paint: The ICA's latest ambitious exhibition

Beware Wet Paint

The ICA's latest ambitious exhibition
Pink Floyd have produced some of rock's greatest ever album covers

Pink Floyd have produced some of rock's greatest ever album covers

Can 'The Endless River' carry on the tradition?
Sanctuary for the suicidal

Sanctuary for the suicidal

One mother's story of how London charity Maytree helped her son with his depression
A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits