Behind Goldman Sach's asset management moves

It was big news when Goldman Sachs allowed Raanan Agus, head of proprietary equity trading, to set up an in-house hedge fund. At the time, it was played as a way to retain top trading talent. Financial News Online notes that moving top prop traders into asset management is an idea that other banks have also embraced, notably Citigroup and Bear Stearns. In addition to retention, there's another reason that has to do with somehow boosting the supposedly higher multiple that Wall Street accords assets under management, which in theory generate predictable revenue streams. In contrast, prop trading assets are seen as more volatile. Makes sense. Of course, given Global Alpha's problems, the firm is hungry for another flagship-type fund.  

For more:
- here's the Financial News Online article

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Read more on: Goldman Sachs l Raanan Agus l Citigroup l Bear Stearns