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Goldman Sachs Making Room For New Child By Evicting Slightly Older Brother

It’s OK, though: Simon has already mastered structured finance.
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By Hempdiddy at English Wikipedia [Public domain], via Wikimedia Commons

Get a job, kid. By Hempdiddy at English Wikipedia [Public domain], via Wikimedia Commons

Little Marcus Goldman Sachs is growing up. He’s almost nine months old now, and in many ways is advanced for his age: He’s already in Little League and has braces. Papa Lloyd even got him a puppy. But before you begin showering him and his proud parents (don't forget his other dad, Marty) with your Mazel Tovs, do know that it hasn’t been all smooth sailing. Marcus isn’t growing as fast as dads would like, and so he’s on track for a heavy diet of retail ad blitzes and deposit calisthenics.

All that stuff takes up room. And there are rumors that a new, potentially-robotic brother might be in the offing. Simply put, 200 West just isn’t big enough for the growing retail banking unit and his growing family. And that means it’s time for big brother Simon to make his own way in the world.

Goldman is soliciting investments that would value Simon at about $75 million and lay the groundwork for a spinoff of the business, according to people familiar with the matter.

Simon is an online marketplace for structured notes, bondlike instruments that pay investors based on the performance of other financial metrics, like the S&P 500 or oil prices. It has done well with retail brokers who buy these products but has been slower to take off among banks that issue them—Goldman rivals.

And the only way to achieve the success that he was born to enjoy is to cut the cord. Don’t worry, though: Simon’s two whole years old, and his slightly older brothers are already thriving.

It would also mark the latest bid by Goldman to monetize software it initially developed for internal use. Goldman in 2015 spun out a series of apps it had built to allow its employees to access their work email on mobile devices. An internal chat tool called Live Current became the basis for the Symphony message service now available across Wall Street.

Goldman Sachs Eyes Spinoff of Simon, an Online Tool for Bond Sales [WSJ]



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