In the investment banking world, it's important to cultivate key relationships with powerful people. It is a way to riches.
This has certainly been the case with Byron Trott, a top Goldman Sachs (NYSE: GS) banker. His top client? Warren Buffett.
Well, it appears that Trott has decided to leave Goldman (keep in mind that Trott has been with the firm since the early 1980s). That is, he will now operate his own merchant bank. In fact, he plans to raise as much as $2 billion for a fund.
And, I'm sure the deals will be smart ones. After all, Trott helped Buffett with Mars' purchase of Wm Wrigley, as well as the $5 billion preferred investment in Goldman (from Buffett).
For the most part, Trott's move is inevitable. With the tight restrictions on compensation (because of TARP financing), it's tough to keep rainmakers on board. In other words, the "brain drain" is going to put further pressure on an industry that is already getting its share of punishment.
Tom Taulli is the author of various books, including The Complete M&A Handbook
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Reader Comments (Page 1 of 1)
3-31-2009 @ 4:49PM
BHarrison said...
Ahhhhh . . . so "capitalism" is going to stimulate the creation of new, stronger, and more ethical banks. The cap on compensations in the "bailed out" banks is going to force the more talented guys to start up more financially stable banks. Isn't that what capitalism is all about . . . the "natural selections and evolutions of business enterprises?
Now my concern is: "Where are the NEW REGULATIONS to keep these bright guys from taking too much in salaries, bonuses or other compensations?"
We do not need a "repeat" of the excessive and exorbitant salaries and oher compensations for the CEOs and upper management . . . it is time to have reasonable and prudent restrictions placed on the compensations of corporate management to PREVENT the reoccurrrance of the conditions that have basically caused the ongoing economic debacles.
When is Congress going to issue NEW regulations to prevent the unethical excesses of the past? These "bright guys" starting up new banks with "fresh money" isnot going to solve the problems if there are not regualtions and oversights to prevent the "excesses" of the past.
When is Congress going to address these problems?