Outlook: Truth of the Goldman float
Tuesday 09 June 1998
One of the problems with a partnership is that there is a constant leakage of capital out of the business as older partners retire and realise the fruits of their labour. With a wasting capital base of this type, the business has to run overtime. It is faced with the task not just of servicing the capital, but of earning sufficient to replace it as well.
This, it is claimed, puts a partnership at a significant competitive disadvantage to incorporated investment banks as well as making it virtually impossible to acquire businesses of any size. Goldman Sachs is at present the best at most of what it does, but there is a real fear that unless it incorporates it will begin to lag.
There may be something in these arguments but they are eerily reminiscent of the sort of thing said by the converting building societies as they hurtled down the path to flotation. One of the justifications used by the building societies for conversion is that it would give them greater access to capital.
Since flotation, they have all been repaying their capital by the lorry load; as it transpired, they already had more capital than they could sensibly use. So let's be honest about this, shall we guys? Conversion of a partnership or mutually owned organisation into a publicly listed company is about the present generation of owners cashing in their chips at the expense of future generations. We can all desperately search for a higher purpose, but the reality is a more down to earth and self-interested one.
- 1 Hilary Mantel 'should be investigated by police' over Margaret Thatcher assassination story, says Lord Bell
- 2 Stamford Hill council removes 'unacceptable' posters telling women which side of the road to walk down
- 3 Kim Kardashian 'nude pictures' leaked on 4chan weeks after Jennifer Lawrence 'The Fappening' scandal
- 4 Iranian blogger found guilty of insulting Prophet Mohammad on Facebook sentenced to death
- 5 New Tricks: Dennis Waterman to leave the show after a decade of crime-solving
Stamford Hill council removes 'unacceptable' posters telling women which side of the road to walk down
Kim Kardashian 'nude pictures' leaked on 4chan weeks after Jennifer Lawrence 'The Fappening' scandal
Iranian blogger found guilty of insulting Prophet Mohammad on Facebook sentenced to death
Ice Bucket Challenge: US firefighter Tony Grider dies after participating in charity craze near power lines
Hitler’s former food taster reveals the horrors of the Wolf’s Lair
Scottish independence referendum: A nation divided against itself
Scottish referendum results: Cross-party consensus collapses amid Tory-Labour spat on the 'English question'
Scottish independence: David Cameron is becoming the 'George Bush of Britain'
Russia freezes Ukraine into submission: Kiev admits country doesn't have enough fuel for winter
Archbishop of Canterbury admits doubts about existence of God
Plebgate MP Andrew Mitchell called officer a 'little s**t', claim court documents 'exposing ex-Chief Whip's 'record of abusing police'
iJobs Money & Business
£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...
Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...
£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...
To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...