Key Takeaways
- • Goldman Sachs is experiencing significant senior trader departures in fixed income, with Uberto Palomba (co-head of EMEA emerging markets trading) and Jonathan Tipermas (head of US dollar swaps desk) both joining Citadel's fixed income funds in London and New York, respectively.
- • Nick Bhuta, head of Goldman's Eurogoverments bond business, has reportedly left for hedge fund Tudor Capital, representing a third high-profile departure from the fixed income division.
- • Goldman Sachs compensation for fixed income staff lagged competitors following a difficult 2013, according to headhunters cited in the report, directly contributing to the talent exodus post-bonus season.
- • Ashok Varadhan, head of macro trading in the securities business, has been promoted to co-head of the securities division in an apparent attempt to stabilize the fixed income business, but the move creates structural redundancy with three division heads now in place.
- • Goldman's securities division now operates with three co-heads—Varadhan, Isabelle Ealet, and Pablo Salame—suggesting an organizational response to management challenges rather than a streamlined solution.
Summary
Goldman Sachs is confronting a significant talent drain in fixed income following the 2014 bonus season, with multiple senior traders departing for hedge funds. Bloomberg reports that Uberto Palomba, co-head of emerging markets trading for EMEA, and Jonathan Tipermas, head of Goldman's US dollar swaps desk, are both leaving for Citadel. Palomba will join Citadel's fixed income fund in London, while Tipermas will join the New York-based fixed income operation. These departures follow earlier reports that Nick Bhuta, head of Goldman's Eurogoverments bond business, had exited for Tudor Capital.
Industry headhunters attribute the exodus to compensation inadequacy. Sources indicate that Goldman Sachs paid its fixed income staff poorly following what was characterized as a difficult 2013, with one headhunter stating: "This is why you are seeing so many people leaving." The timing of these departures immediately post-bonus season underscores compensation as the primary driver. Notably, Goldman did not significantly reduce risk-taking in 2013 compared to many competitors, a factor that may have intensified internal frustration over pay.
In response, Goldman has promoted Ashok Varadhan, head of macro trading in the securities business, to co-head of the securities division. Varadhan brings extensive experience, having previously served as global head of FX and global head of fixed income, currency, and commodities emerging markets. The promotion memo emphasized his "deep understanding" of the securities business. However, the move appears reactive rather than strategically coherent: Goldman's securities division now operates with three co-heads—Varadhan alongside Isabelle Ealet (former commodities trader) and Pablo Salame (credit, mortgages, and equity derivatives background)—suggesting organizational strain rather than decisive leadership consolidation. The structural redundancy raises questions about whether the promotion effectively addresses the underlying talent retention and compensation challenges.
Industry headhunters attribute the exodus to compensation inadequacy. Sources indicate that Goldman Sachs paid its fixed income staff poorly following what was characterized as a difficult 2013, with one headhunter stating: "This is why you are seeing so many people leaving." The timing of these departures immediately post-bonus season underscores compensation as the primary driver. Notably, Goldman did not significantly reduce risk-taking in 2013 compared to many competitors, a factor that may have intensified internal frustration over pay.
In response, Goldman has promoted Ashok Varadhan, head of macro trading in the securities business, to co-head of the securities division. Varadhan brings extensive experience, having previously served as global head of FX and global head of fixed income, currency, and commodities emerging markets. The promotion memo emphasized his "deep understanding" of the securities business. However, the move appears reactive rather than strategically coherent: Goldman's securities division now operates with three co-heads—Varadhan alongside Isabelle Ealet (former commodities trader) and Pablo Salame (credit, mortgages, and equity derivatives background)—suggesting organizational strain rather than decisive leadership consolidation. The structural redundancy raises questions about whether the promotion effectively addresses the underlying talent retention and compensation challenges.
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