Goldman Sachs' mistake and the man who made $100m
When Goldman Sachs announced its acquisition of wealth management fintech United Capital for $750m (cash) in 2019, CEO David Solomon was feeling pretty bullish. - United Capital would "help accelerate" Goldman's wealth management strategy, he declared. Four years later, Solomon is tacitly admitting he made a mistake: Goldman said today that it's exploring a sale of United Capital as it evaluates its personal financial management business.
While Goldman's share price is down over 1% as a result of its change of heart and Solomon is lambasted for his strategic errors, Joe Duran - the man who founded and sold United Capital, is doing just fine.
Duran, who is an avid practitioner of yoga and who worked his way up from minimum wage jobs, netted an alleged $75m-$150m from Goldman's purchase of United Capital four years ago. Initially, Goldman also hired him as a partner (on a presumed $950k salary), but Duran left the firm in February '23 after the integration of the two firms was declared complete. When he quit, Duran was due to stay on at Goldman as a consultant, but only last week he announced that he's busy raising money for a new business venture in the registered investment advisor space.
Duran, who describes himself as a serial entrepreneur, has presumably spent the past few months with his wife and daughters, living off the money he made from Goldman Sachs.
Meanwhile, it's not clear whether Goldman Sachs faces a writedown on its $750m United Capital investment. The firm already took a $504m writedown on the Greensky home loan business it bought for a $2.2bn stock deal in 2021, and which it's also trying to sell on again. While Goldman employees suffer through the share price, the best way to make money at Goldman in recent years seems to have been to concoct a consumer finance company and pitch it to the executive team.
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