Goldman Sachs finally trusts Russians to run its Moscow operations

By bne IntelliNews October 1, 2015

Jason Corcoran in Moscow -


Goldman Sachs, Wall Street's most profitable investment bank, has finally decided to trust Russian financiers to run its operation in Moscow.

After reshuffling the deck, the bank said its business in Russia will now be now by Sergei Arsenyev and Dmitri Sedov, along with Tim Talkington, an American who will act like a chaperon to the two Russians who have finally got the keys to the fast car.

Goldman Sachs, dubbed affectionately "a great vampire squid" by former Moscow journalist Matt Taibbi, hasn't had a Russian citizen as head or co-head of its Moscow office since Elena Titova left in 2006.

The existing double-act of Italian financier Paolo Zannoni and American Nicholas Jordan will step down as co-chief executive officers of the Russia/CIS business to make way for the three-headed eagle.

Goldman usually has two heads in Moscow but never three until now. Americans Chris Barter and David Schwimmer previously ran the business until Barter teamed up with Frenchman Jean Raby.

Barter told this journalist during his tenure about  four years ago that Goldman was preparing and molding Russians to take over one day. 

The departure of Zannoni from Moscow means there is just one partner, namely Maxim Klimov, remaining in Russia. Oddly enough, Klimov wasn't in the running or wasn't interested in the top job even through he's raked in many millions from running the special situations unit in Russia. 

The parachuting in of Nick Jordan from UBS just over two years ago shocked many local staffers, because Goldman typically promotes from its own benches for top roles. Jordan has jumped like an annuated Premiership football player from club to club  over the past 11 years since leaving Deutsche Bank. He was paid more than $7mn a year to join Lehman from the German lender until it blew up. After losing his bid to run the merged operation with Nomura Holdings, Jordan surfaced at UBS where he remained for less than three years until Goldman's chequebook came calling.

The bank, led by Lloyd Blankfein, has struggled after opening its first office in Moscow in 1994 because of its perceived lack of commitment. It scaled back soon after as part of a worldwide retrenchment, returned in 1998 weeks before Russia defaulted, withdrew almost entirely after the crisis and ramped up again in 2006.

Goldman banker Brett Olsher will chair a new Russia Executive Leadership Group aimed at expanding the group's local business in the face of shrinking margins, crippling sanctions and a wide investor aversion to Russian risk. Klimov is also a member along with the three-headed eagle.

The current outlook for investment bankers in Moscow looks grim. Deutsche Bank, the leading player for the past two decades, is shutting its operation following allegations its bankers laundered money on behalf of its clients. Other players have cut personnel and costs and shunted their best talent to London, where they can work on different emerging markets.

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