Meet Goldman Sachs' top quant, Bankers in Portland, Alt data may not be a gold mine

Hi readers,

This year's IPO class has been a case of the haves — and the have-nots.

This week, we saw the software companies Datadog and Ping Identity soar in their public-market debuts.

Compare that with SmileDirectClub, the teeth-straightening company that was the first US IPO since the financial crisis to raise more than $1 billion and price above range but fall in its opening trade. That led some to believe the IPO had been mispriced by its lead bank, JPMorgan. The company's CEO went as far as to complain to JPMorgan CEO Jamie Dimon to find out what went wrong with the listing, Business Insider reported this week.

It remains to be seen how other buzzy companies will fare in the markets this year. WeWork's IPO remains on ice, at least through the Jewish holidays in October, as investors have grown disillusioned with the company's unclear path to profitability, business model, complex structure, hefty valuation, and controversial governance.

On the flip side, we went to Peloton's investor-road-show stop in New York this week, where we saw potential investors snapping selfies with star instructors alongside the buzzy exercise company's $2,000 bikes. Overall, portfolio managers we spoke with said they were excited about Peloton's prospects, despite the struggles of other consumer-facing companies to list this year, like Uber and Lyft (both are trading below their IPO prices).

And, of course, everyone is holding their breath for Saudi Aramco, which could be history's largest IPO whenever it goes public — the latest reporting pegs it in 2020 or 2021.

I can't believe it's finally fall! In true seasonal fashion last weekend, we went pumpkin and apple picking, and now have way too many Honeycrisps. I'm in the market for some recipes to use up everything from my apple haul. Any ideas?

As always, let us know what we should be writing about!

Olivia

JPMorgan is winning the most hedge-fund business as Wall Street banks swoop in on Deutsche Bank's clients

Following Deutsche Bank's industry-rattling equities exit this summer, top Wall Street competitors have been feasting on the firm's most coveted prime-brokerage assets.

JPMorgan is emerging as an early victor, raking in as much as $40 billion in new assets from top-tier hedge funds, including Renaissance Technologies and D.E. Shaw, according to people familiar with the matter.

Other top banks have also grabbed billions in assets from Deutsche's clients, and only about $75 billion out of the firm's nearly $200 billion in balances still remain, sources said.

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Alternative-data player Thasos just laid off the majority of its staff and its CEO resigned. It might be a sign of tough times to come for a market set to grow to $7 billion.

The CEO of Thasos, an alternative-data company, has stepped down and roughly two-thirds of its staff have been laid off, sources told Business Insider.

Thasos was struggling to sell its product, despite the fact that the company was on Bloomberg's alternative-data platform and hedge funds are planning to pump more money than ever into the market.

The struggles of Thasos might be a sign that the booming alternative-data space — which Deloitte projects will exceed $7 billion in 2020 — is not the gold mine some believe it to be.

Goldman Sachs is offering buyouts to encourage partners to leave as CEO David Solomon works to shrink one of the most elite clubs on Wall Street

Goldman Sachs CEO David Solomon and his second-in-command, President John Waldron, are offering some partners generous payouts, insiders said.

Solomon has been pushing to refocus the partnership on revenue producers and restore exclusivity to one of Wall Street's most prestigious titles.

The pace of exits has picked up, with securities-division cohead Marty Chavez and equities cochief Jeff Nedelman resigning last week. Elisha Wiesel, the cochief information officer, and Dane Holmes, the head of human resources, announced exits this week.

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Bank of America's aggressive push into cities like Portland, Nashville, and Denver is helping reclaim ground lost to dealmaking rivals. Now it's eyeing the rest of the US.

Bank of America is chasing smaller deals and expanding its investment bank to far-flung American locations that it had previously ignored, adding San Diego, Salt Lake City, and Nashville, Tennessee, to its roster this year.

Bank of America's regional and middle-market push, feeding off the bank's vast commercial-banking and wealth-management footprint, has helped the firm rebound from a difficult 2018. It's clawing back market share and rising up the league tables.

Now it's doubling down on this strategy, announcing new teams and key hires this summer in a quest to dominate middle-market investment banking.

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WeWork's competitors are scrambling to distance themselves from the coworking giant — and many are following the same script

Business Insider spoke with execs at four coworking and flex-space providers in recent weeks as WeWork's valuation came under scrutiny. Then came news that WeWork was postponing its initial public offering.

The executives were largely singing the same tune; they were quick to point out the differences between their companies and WeWork but still highlighted WeWork's growth.

Some said that recent negative media attention on WeWork and a "frothy news cycle" were distorting the public image of the underlying industry.

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Goldman Sachs' massive quant business now rivals AQR and Two Sigma. We talked to the bank's top quant about asset growth, finding data sources, and why critics of computerized trading are wrong.

Goldman Sachs' Quantitative Investing Strategies group is one of the Wall Street bank's biggest and fastest-growing units.

The unit, known as QIS, has nearly doubled its assets under management in 2 1/2 years to almost $180 billion. That makes it bigger than most quant hedge funds.

That success will help Goldman seize on one of the few secular growth opportunities it has right now: a surge in demand for alternatives investing.

READ MORE HERE »

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