Goldman's US Prop Traders Talking to Buy-Side Firms

Goldman Sachs
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Goldman Sachs

A group of proprietary traders from Goldman Sachs, the Wall Street giant, are in talks with at least five different money-management or investment firms about new jobs, say people familiar with the matter.

The firms include Kohlberg Kravis Roberts, Perella Weinberg Partners, Pimco, The Carlyle Group and BlackRock, according to the people familiar with the matter.

But what exactly these firms would do with these traders varies depending on their own strategy. BlackRock, for instance, has no interest in delving in to the prop-trading business, said one person familiar with the firm's thinking, but could potentially hire GSPS alumni in other trading capacities.

Goldman plans to shed the prop-trading unit, called Goldman Sachs Principle Strategies or GSPS, say other people familiar with the matter, in order to comply with the Dodd-Frank Act, which prohibits the trading of securities strictly for a bank's own account.

In their heyday in the mid-2000s, GSPS managed about $18 billion, say people with knowledge of their operation.

But that amount dropped significantly in 2007, when half the group decamped for Goldman's asset-management unit to start a new internal hedge fund. GSPS now trades with $10 billion, these people say.