On Thursday, Goldman promoted 425 people to managing director, making it the largest class of MDs in the firm’s history. Managing director is highest ranking you can achieve before making partner.
The standout division this year was the investment-banking division, with 96 bankers joining the class. The last class, which had 280 people total, had only 51 bankers.
Bankers made up 22.5% of the MD class this time around, versus 18.2% last time around.
The shift is important, as the newly appointed managing directors will help shape the future of the bank. Goldman’s investment bank has moved back into the ascendancy following the financial crisis, as post-crisis regulation and low interest rates have crimped trading revenues.
Goldman has been crushing it in investment banking, reporting revenues of $5.5 billion for the first nine months of the year, the highest since the first nine months of boom year 2007.
The financial-advisory business, otherwise known as M&A, is having a stellar year, with revenues of $2.6 billion for the first nine months. That is up 45% on the same period in 2014. Equity and debt capital markets revenues are down year-on-year, in contrast.
Lloyd Blankfein, chief executive, said in the quarterly earnings report that the bank continued to experience strong levels of activity in investment banking. The bank later said in its 10-Q filing that the expected revenues from the bank’s backlog of deal work grew in the third quarter.
The performance of the sales and trading business hasn’t been nearly as strong. Revenues from equity and fixed-income sales and trading over the first nine months are up 2%, with the fixed-income component of that down 14%.
The title of managing director is reserved for the firm’s top performers. It’s a big honor. It’s just one level below being made partner, one of Wall Street’s most coveted titles.
Goldman had been selecting managing directors every year since 1996. In 2013, Goldman switched to a biennial selection, which explains the historic class size.