Morning Coffee: Goldman Sachs’ chief ego smoother is leaving. The bankers that must never become CEOs

The hierarchy of banking titles is quite hard to outsiders to understand.  In most corporations, “vice president” is a very senior position, but in investment banking it’s about half way up the ranks.  Even more confusingly, although an “executive director” is junior to a managing director, an “executive vice president” is often significantly more senior; adding the word “executive” seems to restore the position to its level in other industries.  But the very best title to have is something like “Mister Fix-It”, the unofficial title given by Goldman Sachs to Russell Horwitz, whose retirement was announced yesterday.

Horwitz' official title was “Chief of Staff”, which is as important as it sounds – he was a partner and a member of the management committee.  According to the Goldman website, this involves “overseeing the operations of the Executive Office, including corporate communications, government and regulatory affairs, and corporate engagement.”  But even that somewhat understates the role.

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Horwitz’ predecessor in the job, John Rogers was variously known as the “CEO whisperer” or “board whisperer”, depending on who he was giving softly-spoken but at times blunt advice to.  Which seems to be the key skill for being a chief of staff.  When you think about it, the one thing that public relations, government affairs and corporate engagement have in common is that they involve carrying messages from outside the organisation to people who spend most of their time and energy inside it.

Which means that Horwitz, and Rogers before him, regularly had to carry out that most sensitive and horrible task; that of smoothing egos. Telling important people that the way they see themselves is not exactly the way that others see them.  Doing that while keeping your job and your friends is a difficult skill to learn; it’s probably no coincidence that both men started their careers in government.  And it’s also entirely in character that although Horwitz did actually leave Goldman Sachs (for Citadel) in 2020, he did so on the best of terms, with warm tributes on his exit and even warmer ones on his return.

It’s also notable that back in late 2023 when Horwitz became chief of staff, David Solomon was suffering from really bad press coverage, and from strained relationships with the senior Partners at Goldman Sachs.  And now, two and a half years later, his internal and external image is much better. That’s unlikely to be the work of just one person, but a good chief of staff can make a huge difference. 

Horwitz teaches us that if you can master the art of dealing with big egos, you can achieve a lot.  In banking, you get a lot further with a kind word and a million dollars, than just a kind word.  But to reach the very top, you might need both.

Elsewhere, an interesting question is raised – although equity analysts quite often switch sides to become CFOs or heads of strategy, they almost never become CEOs.  Why not? 

If you try to think past the obvious response (“good heavens, absolutely not, have you ever met any?”), it’s quite revealing about the nature of the job.  In principle, a good equity analyst ought to be a strong candidate; they are industry experts, they know the business lines and key drivers of companies they cover, and the best ones are good communicators, good with people and used to very hard work.

But the exorbitant privilege of the sell-side analyst’s job, the thing which sets it apart from almost everything else in banking, is the ability to change your mind at a moment’s notice.  A good equity analyst is one who can go from “buy” to “sell” or vice versa, at the press of a button and leave behind everything they previously said to concentrate on the new trend.

This is a particular skill; anyone who has worked in banking knows that the ability to change one’s mind is as rare as it’s valuable.  But it’s a recipe for chaos when applied to the real world of business.  Analysts do better when they stay in their lane.

Meanwhile… 

The judge in the Chirayu Rana / Lorna Hajdini case seems to anticipate what kind of a spectacle she is at risk of presiding over, and has asked “that everyone talk to their respective clients to the extent that they can and find out what, if anything, can make this case resolve itself”.  Rana’s lawyer has quit, and the judge has ruled that his ill-fated quest to maintain his anonymity in the case has come to an end. (NY Post)

Alantra is still on the front foot in mid market investment banking, hiring Marius Halvorsen to cover maritime and offshore industries. (Financial News)

One of the key reasons why Centerview hired Mathieu Pigasse from Lazard was to build up its sovereign restructuring advisory practice, and this appears to have paid off big-time. The punk rocker of French investment banking has landed the deal for Venezuela’s $150bn of outstanding debt. (WSJ)

The Japanese market is still hot; Morgan Stanley has hired Naoyuki Kumon from SocGen, in the kind of “smaller player to bulge bracket” move which often indicates that recruiters are widening the talent pool. (Bloomberg)

Some details are beginning to emerge of the likely future shape of Jain Global after its deal with Millennium.  Although back office staff have had their employment guaranteed, the fundamental equities unit seems to be shedding portfolio managers and “Jain Global is evaluating the overall group as the firm plans its next stage”.  It is still hiring quants, though. (Business Insider)

“AI Natives” are about to graduate and hit the job market.  Although many employers are worrying about kids with atrophied critical thinking skills (or those who simply didn’t learn anything on their degrees because they cheated), there are also candidates like Thomas Lee, who has joined a private equity firm and is holding vibe coding classes for his colleagues. (WSJ)

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