Morning Coffee: Goldman Sachs’ nicest man seems to have won the prize. Millennium employees enter the Matrix

In investment banking careers at the top level, perhaps the most important attribute to have is self-knowledge.  If you underestimate your own capabilities, then you’ll be too timid, but if you overestimate your value to others, you might end up with a nasty surprise.  John Waldron of Goldman Sachs is deservedly popular for being burdened with neither false modesty nor arrogance, and it seems that this may have put him into the lead in the board’s succession planning for CEO David Solomon.

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The firm has made it clear that the board talks about succession all the time, and that there is “no definitive timeline” for Solomon to step down (although 'executives close to Solomon' have reportedly been saying "no later than 2028."). Waldron has been the most likely candidate for a while now, ever since he was promoted to the board eighteen months ago.  He is thought to have the support of the partnership, and his appointment would be in line with one of the empirical regularities of bank CEOs – the “Principle of Flashy/Folksy Alternation”, which holds that an extrovert with star power (like David Solomon) will be succeeded by an archetypally nice, quietly spoken family man (like John Waldron).

Waldron once wanted to be a writer, and like Marc Rowan at Apollo has been described as having a studious and academic air. However, although Waldron isn’t necessarily a big personality, he’s certainly not short of self confidence.  Not so long ago, he gave Goldman an ultimatum – he had a job offer from Apollo worth $500m.  Money isn’t everything, but he was prepared to make the case to the board that if he was going to turn down life-transforming, generational wealth, it needed to be for something which gave him a reasonable degree of assurance that he could reach the top at GS.

This is a gutsy move. At any level of banking, it’s generally believed that you can get yourself “bid back” a maximum of once. Although the job is literally made of transactions, senior bankers don’t like to be put in a position of having to recognise that their relationships are transactional to a significant degree, and that if you want to retain the services of one of the world’s best bankers, you need to pay the going rate.  Handling this kind of negotiation on behalf of Goldman Sachs was one of the skills which gained Waldron the nickname of “the banker whisperer”, so some people might have felt a little bit put out that he was capable of managing both sides of a tricky conversation.

And he may need to do a bit more whispering.  Dan Dees and Ashok Varadhan, the co-heads of global banking and markets and asset management head Marc Nachmann, are all only a couple of years younger than Waldron, meaning that if he is indeed appointed, it’s likely that the next Goldman CEO will come from the following generation. 

Elsewhere, all staff at Millennium Management are going to be given a “digital twin”, which sounds extremely futuristic. The reality seems to be a bit less science-fictional than the name, though – the digital twin is an AI agent, of course, but it’s main function seems to be “remembering their preferences and handling repetitive tasks, like research, meeting preparation, and inbox management.”  Millennium are very keen to point out that the digital twins will not be given decision-making powers and certainly won’t be allowed to place trades; in all honesty, the combination of inbox, calendar and news feed sounds more like what used to be called a “home page” than anything else.

The digital twins are also meant to be proof against a kind of risk which many employees would fear, though – the possibility that their colleagues might like the robot better than the person who it’s meant to be a twin of.  The digital twins are only allowed to correspond with their “owners”. Although the next project appears to be the creation of “digital teammates”, so Millennium analysts might still have reason to be at least a little bit worried.

Meanwhile …

Piper  Sandler is, according to “a person familiar with the matter”, in talks to buy Perella Weinberg, creating a somewhat bigger super-boutique.  The deal might close sectoral gaps in energy and consumer/retail. (Bloomberg)

The Barclays return-to-office plan has been delayed somewhat – it was due to come in next Monday, but an email has gone out saying that “we are extending the implementation period” to 2027, “to ensure colleagues have the right support”.  They are also apparently “reviewing our flexible working policy”.  In general, it’s usually regarded as a bullish sign for the market when employees get the upper hand on working conditions. (FT)

A somewhat less bullish sign is that bankers in the software sector are trying to handle private equity exits by recruiting small groups of investors rather than a public offer process, to avoid the risk of a high profile flop. (Pitchbook)

Rama Variankaval is leaving JP Morgan after 23 years.  His specialist advisory team working on low-carbon transition issues is going to be folded into a broader energy, geopolitical and environmental practice led by Heather Zichal, while former US NOAA chief scientist Sarah Kapnick will continue to run the climate advisory business. (Bloomberg)

The flow of JP Morgan dealmakers to Citi hasn’t completely stopped – Chris Power. JPM’s co-head of chemicals investment banking, is moving across to take the same role alongside Arkadi Nachimowski. (Financial News)

Proving once more that the tech sector have not learned much from the way that finance bros made themselves so unpopular, Instagram apparently made swag (in the form of “a/c priv” baseball caps, referring to attorney client privilege) for a team who were responsible for “tidying up” legal files ahead of litigation. (NY Post)

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