Goldman creates ‘brain trust’ in effort to boost deals business

NEW YORK: Goldman Sachs Group Inc is betting it can get its money-making mojo back by pitching creative deals to big, complex clients, marking a return to its investment banking roots as trading revenue slows.
The Wall Street bank is forming a group, known internally as the Innovation Lab, focused on generating compelling deal ideas for companies like Warren Buffett’s conglomerate Berkshire Hathaway Inc or Japan’s SoftBank Group Corp’s $93 billion investment fund, people familiar with the matter said.
The new “brain trust,” as one insider called it, is aimed at supercharging investment banking revenue as trading, for many years Goldman’s profit engine, has faltered amid regulations and market trends that hurt the bank more than rivals.
From 2009-2016, Goldman’s annual trading revenue fell by more than $18 billion, or 32 per cent, while investment banking revenue rose by $1.3 billion, or 26 per cent. That trend has accelerated this year.
Analysts expect Goldman to reveal more trading pain when it reports third-quarter results on Tuesday, building on two consecutive quarters of declines.— Reuters

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